Health Insurers to Pay Back America $1.3 Billion
The Affordable Care Act has a provision in it that requires health insurance companies to only spend at least 80-85% of earnings toward actual health care, if not, then the companies need to reimburse the those that paid in to the health plans.Talking Points Memo writes:
By this August, insurers are projected to send consumers a total of $1.3 billion in rebates, according to a Kaiser Family Foundation analysis released Thursday — $541 million to large employers, $377 million to small businesses and $426 million to people with their own insurance plans.
Tags: Health Insurance
I tell that dang gum socialism is gonna… what?..wait…I’m getting money back?
If the supreme court overturns the health care law, the rebate becomes an illegal penalty and no longer gets refunded to businesses and consumers. It continues to be kept by the insurance companies.
As recently as 20 years ago, most health insurance companies paid in claims 80+ cents of every dollar earned. Blue Cross Blue Shield of Delaware is still in that range. Medicare pays around 95 cents of every dollar in claims! How does Medicare, that BIG GOVERNMENT program do that? No huge advertising budget and no even “huger” executive pay and golden parachutes.
Ah deregulation. When we enrich the CEO’s, everybody wins. (If by winning you mean shoddier, more expensive healthcare.)
Mitch Crane,
The statement that medicare pays 95% of every dollar in claims is a bit disingenuous. A lot of overhead involved with running medicare gets outsourced to other agencies, so that it doesn’t show up as medicare “overhead”. For example, IRS and the Social Security Adminstration collecting funds for medicare doesn’t count as “overhead” for medicare, but collecting funds counts for private insurers. The Department of Health and Human Services and Justice Department also do a lot of work for medicare, like accounting, auditing, checking for medicare fraud, and challenging fraud in court; but NONE of this work shows up as “overhead” for Medicare. All of this work done for medicare is funded by outside agencies, so it shows up somewhere else.
Second, many states tax premiums from private insurers, which shows up as “overhead” for private insurers. Medicare, a federal program, does not have to pay this same “excise tax” for its premiums.
Third, the patients covered by medicare (older and thus consume more health care) and private insurance are much different. With the claims ratio calculated as medical claims/ (medical claims + overhead or adminstration costs), then as one consumes more medical claim, the ratio will general increase to 1 or 100%. As administrative costs are generally the same per person, the medical claim ratio appears more efficient for medicare, because medicare patients consume way more medical care than the average privately insured patient.
I’ve read and heard this claim many times, but it’s just not an apples to apples comparison.
Jason 330,
In 2008, Aetna’s CEO, the highest paid CEO of any private health insurer made 24 million dollars. In 2008, Aetna gave health insurance to 17.4 million people (Aetna also provides many other types of insurance). So wiping out the income of Aetna’s CEO income would save each member about $1.37.
So yeah, I think the actual market wage for such CEOs is not this amount and I wouldn’t even know what to do with that amount money if I ever earned that wage. But CEO compensation, by no means, actually affects the overall cost of medicine in the US.
Maybe 24 million dollars in salary. The real money is in bonuses derived from not paying out claims.
On October 15, 2006, it was announced that McGuire would step down immediately as chairman and director of UnitedHealth. McGuire remained as chief executive officer through December 1, and was succeeded by Stephen Hemsley (then president and chief operating officer, and a member of the board of directors). From 1989 until 2006, McGuire received compensation from UnitedHealth in the form of stock options that eventually became worth around $1.6 billion.[6] However, in the course of the litigations that followed his departure from the company, McGuire was temporarily enjoined from exercising the options. The injunction was later released in late 2008.[7]