putting our premiums into medical care not profits

[xchrom]

http://www.nationofchange.org/putting-our-premiums-medical-care-not-profits-1335799368

The recent news from the nonpartisan Kaiser Family Foundation that health insurers will have to send rebate checks totaling more than $1.3 billion to Americans this summer was especially gratifying to me. It more than justified my decision three years ago to clue members of Congress in on how insurance companies have systematically been devoting ever-increasing portions of our premium dollars to rewarding their shareholders and top executives.

Following my initial testimony in June 2009, Senator Jay Rockefeller (D-W.Va.) and other lawmakers drafted language for the health care reform bill requiring insurance firms to spend at least 80 percent of what we pay in premiums on actual medical care. Despite an intense lobbying effort by insurers, the language emerged unscathed in the final bill. That defeat for the insurance industry is turning out to be a big win for consumers.

One of the reasons I decided to testify in the first place was to explain why Americans are getting far less value for the premiums they pay than they were a few years earlier. As I told members of the Senate Commerce Committee, which Rockefeller chairs, for-profit insurers are under intense pressure from both shareholders and Wall Street financial analysts to show that the portion of their policyholders’ premiums they used to pay claims during the preceding quarter was less than the amount they paid during the same period a year earlier.

I explained that even profitable companies can see sharp declines in their stock prices within minutes if shareholders and analysts are disappointed in an obscure measure called the medical loss ratio (MLR). The MLR is the ratio between what a company actually spends on medical care and what it has left over to cover sales, marketing, underwriting and other administrative expenses, and, of course, profits. The less a company spends on care, the more is available to reward shareholders. That’s why insurers consider the money they spend on our care to be a loss.

[tooeyeten]

1. While this guy supports Ryan's plan

The lobbyist himself.

Ryan’s linking of the growth of premium assistance to the overall growth of the economy, which historically has increased at a slower pace than health care costs. Because federal spending would be limited, additional costs would likely be borne by Medicare beneficiaries, critics of the Ryan plan say

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