Saturday, July 14, 2012


The days of health care CEOs and industry executive padding their $10 million-plus paychecks and bonuses by denying medical coverage to gravely ill clients who paid their premiums may be at an end.

One part of Obamacare is to force the health insurance industry to adjust the way they prioritize spending, away from immediate big salaries and bonuses towards providing long-term health care insurance without the fear of being dropped or having your services capped. So, instead of spending just 70-75 cents of every dollar on insurance payouts, health care insurance companies must now dedicate at least 80 cents (85 cents for larger firms) of every dollar to health care claims and quality health care improvements. The remaining 20 cents can be used for marketing and administrative costs (like multi-million dollar salaries and bonuses). 

You can read all about this in this Kaiser Foundation report (or this one), or in the Affordable Care Act here (Medical Loss Ratios, starting at p. 204).

What does this mean for you? Simple. If you paid a health care insurance provider that does not use 80 cents of each income dollar on health care they must now refund the difference to you. This is why you are seeing signs and posts like this one ...

The goal is make sure health care providers focus on covering health care costs that you paid for rather than pouring money into exorbitant CEO salaries and unearned shareholder profits (denying coverage is not "earning" money). It's the difference between providing a service and wealth extraction.

More practically, if you are unfortunate enough to find yourself in a hospital you no longer have to worry about your insurance payouts being capped, or being dropped simply because you have an illness that the insurers don't want to pay for after you've paid all your premiums. Here's a short list of things that the Republican party would do away with if the GOP's many votes (33 at last count) to repeal Obamacare bore fruit ... 

And before you start yapping about forcing insurance providers to spend money on what they are paid to insure keep in mind that slot machines in Las Vegas are legally required to payout 75 percent of what they take in (House payouts are higher) to gullible suckers who have NO expectation of winning.

Again, the days of CEOs making hundreds of millions by denying medical coverage to gravely ill patients who paid their premiums may be at an end.

- Mark

P.S. And, yes, if you are opposed to Obamacare and get a refund check from your health care provider you should take a principled stand and send your Obamacare rebate check back to your insurance provider. 

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