Thursday, February 9, 2012

Real Insurance Could Never Operate With An 85% Loss Ratio

Obamacare demands that most health plans operate with a medical loss ratio (MLR) of 85 percent (or 80 percent for the individual market).

Politicians, bureaucrats, and people in general are very fixated on how much of our premiums go to administrative costs, including executive salaries and profits, of health plans. It’s easy to understand a politician winning applause for promising that she’ll ensure health plans spend more of their revenue on patient care.

But there is an even more fundamental question: Why are politicians not attacking other (non-health) insurers who spend only 70, 60, or even 50 cents on the dollar in claims? Surely these insurers are even “greedier” than health insurers.

Read the entire article at John Goodman's Health Policy Blog.

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