Sen. Franken views medical loss ratio provision better than weak public option

[ProSense]

Sen. Franken views medical loss ratio provision better than weak public option

Posted by Tim Budig

Democratic U.S. Senator Al Franken said this week that he views a medical loss ratio provision — language he authored — contained in the Senate health care bill as superior to a weak public option.

Franken called the ratio provision a “much better” cost containment vehicle.

Speaking to the ECM Editorial Board this week, Franken said he used existing health care practices in Minnesota to fashion his provision.

Under it, health care providers would be allowed to spend only a set amount — 15 percent for large group providers, 20 percent for smaller group providers and those offering individual health care policies — on CEO salaries, advertising, and other nonmedical care expenses.

The rest of their budgets has to be directed at patient care.

Asked how the current health care bill negotiations between House and Senate would end up, Franken offered no guess.

<...>

Whatever the final version of the health care bill turns out like, key provisions he favors would certainly be in it, Franken explained.

“I’m going to vote for the bill,” he said.

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[Betty]

1. I don't see how that holds the costs down

in fact, I think it would do just the opposite. If you tell me I get to keep 15% of every dollar I charge, I'm going to want to charge as much as possible.

[kenny blankenship]

2. "Cost-Plus" billing is how KBR-Halliburton ran all their Iraq War scams.

Truck blows a tire on the road, abandon it and purchase a new truck, bill the Gummint again, and pocket a fixed percentage profit on it. Repeat.

This is the same shit.

[jtrockville]

6. Yes, it encourages inefficiency and over-spending.

Think how much more efficiently we could deliver health care if there were no middleman at all? If there were no such thing as a "medical loss ratio"?

[snot]

9. Exactly. They require you to buy from a "preferred provider,"

which they or their cronies own, overcharge for the goods or services, and pass the cost on to employers or the insureds in the form of higher premiums.

I've seen this first-hand -- required to buy medical equipment for $700 that could have been purchased elsewhere for $250.

[SpartanDem]

5. It's based on medical cost occured

[jtrockville]

8. Who defines what a "medical cost" is?

Does it include a week-long training class for insurance agents in the Barbados?
This is the hugest loophole the world has ever seen.

[ProSense]

10. Who defines what it is now?

It's not a huge loophole now so why will this change anything?

[SpartanDem]

11. HHS

Insurers will be required submit yearly reports to HHS and HHS will setting defintiosn of medical cost

`(a) Clear Accounting for Costs- A health insurance issuer offering group or individual health insurance coverage (including a grandfathered health plan) shall, with respect to each plan year, submit to the Secretary a report concerning the ratio of the incurred loss (or incurred claims) plus the loss adjustment expense (or change in contract reserves) to earned premiums. Such report shall include the percentage of total premium revenue, after accounting for collections or receipts for risk adjustment and risk corridors and payments of reinsurance, that such coverage expends--

`(1) on reimbursement for clinical services provided to enrollees under such coverage;

`(2) for activities that improve health care quality; and

`(3) on all other non-claims costs, including an explanation of the nature of such costs, and excluding Federal and State taxes and licensing or regulatory fees.

The Secretary shall make reports received under this section available to the public on the Internet website of the Department of Health and Human Services.

`(b) Ensuring That Consumers Receive Value for Their Premium Payments-

`(1) REQUIREMENT TO PROVIDE VALUE FOR PREMIUM PAYMENTS-

`(A) REQUIREMENT- Beginning not later than January 1, 2011, a health insurance issuer offering group or individual health insurance coverage (including a grandfathered health plan) shall, with respect to each plan year, provide an annual rebate to each enrollee under such coverage, on a pro rata basis, if the ratio of the amount of premium revenue expended by the issuer on costs described in paragraphs (1) and (2) of subsection (a) to the total amount of premium revenue (excluding Federal and State taxes and licensing or regulatory fees and after accounting for payments or receipts for risk adjustment, risk corridors, and reinsurance under sections 1341, 1342, and 1343 of the Patient Protection and Affordable Care Act) for the plan year (except as provided in subparagraph (B)(ii)), is less than--

`(i) with respect to a health insurance issuer offering coverage in the large group market, 85 percent, or such higher percentage as a State may by regulation determine; or

`(ii) with respect to a health insurance issuer offering coverage in the small group market or in the individual market, 80 percent, or such higher percentage as a State may by regulation determine, except that the Secretary may adjust such percentage with respect to a State if the Secretary determines that the application of such 80 percent may destabilize the individual market in such State.

`(B) REBATE AMOUNT-

`(i) CALCULATION OF AMOUNT- The total amount of an annual rebate required under this paragraph shall be in an amount equal to the product of--

`(I) the amount by which the percentage described in clause (i) or (ii) of subparagraph (A) exceeds the ratio described in such subparagraph; and

`(II) the total amount of premium revenue (excluding Federal and State taxes and licensing or regulatory fees and after accounting for payments or receipts for risk adjustment, risk corridors, and reinsurance under sections 1341, 1342, and 1343 of the Patient Protection and Affordable Care Act) for such plan year.

`(ii) CALCULATION BASED ON AVERAGE RATIO- Beginning on January 1, 2014, the determination made under subparagraph (A) for the year involved shall be based on the averages of the premiums expended on the costs described in such subparagraph and total premium revenue for each of the previous 3 years for the plan.

`(2) CONSIDERATION IN SETTING PERCENTAGES- In determining the percentages under paragraph (1), a State shall seek to ensure adequate participation by health insurance issuers, competition in the health insurance market in the State, and value for consumers so that premiums are used for clinical services and quality improvements.

`(3) ENFORCEMENT- The Secretary shall promulgate regulations for enforcing the provisions of this section and may provide for appropriate penalties.

`(c) Definitions- Not later than December 31, 2010, and subject to the certification of the Secretary, the National Association of Insurance Commissioners shall establish uniform definitions of the activities reported under subsection (a) and standardized methodologies for calculating measures of such activities, including definitions of which activities, and in what regard such activities, constitute activities described in subsection (a)(2). Such methodologies shall be designed to take into account the special circumstances of smaller plans, different types of plans, and newer plans.

[gravity]

14. Worst case would be the insurance companies paying more money to healthcare

Which is much better than the current system where insurance companies have an incentive to deny coverage while increasing premiums.

Provisions that increase competition in the insurance market would put downward pressure on premiums anyways.

[AngryAmish]

3. Then they put a lot of salaries as medical costs

Say all administrative staff, all adjusters who determine care, make executives MDs.

Loopholes are giant.

[grytpype]

4. Then he's a corporatist meanie too.

I'm going to cry and vote Republican until they make Dennis Kucinich dictator of America.

[harun]

7. Franken needs to keep quiet until the bill is signed by the Pres. Otherwise the

lobbyists will know what good stuff to destroy.

[hulka38]

12. Is anybody calling for a weak public option?

[Clio the Leo]

13. Smart man that Franken. NT

[uponit7771]

15. Bump, cause Franken needs to be thrown under the bus too now

[Cha]

16. Thanks for the reasoning

Senator Franken..& Pro Sense.