Something huge happened today. The kind of thing that changes the nature of the economy, and Americans’ relationship with their government, and with the corporations that seem to rule so much of our world.
Today is the day that a significant part of the Affordable Care Act took effect. Today is the day that companies that sell and provide health insurance have to start spending 80% to 85% of their income from insurance premiums actually delivering the services for which they charge their customers. Overhead like office space and supplies, marketing expenses, salaries, and yes, profits have to come out of the remaining 15-20%. The rule is called the the medical loss ratio, and in an important decision recently by the Department of Health and Human Services, the insurance companies cannot count the sales commissions that they give out to the people who sell you your insurance plan against the medical loss ratio.
The MLR can ONLY be allowed expenses, which must be actual costs of coverable medical expenses. This is huge. This means no more nonsense like refusing your mother’s cancer treatment because she forgot about that prescription skin cream she had for acne when she was fifteen when she was filling out the application. Hell, the insurance companies are going to be scrambling to pay for coverable things because any part of that 80-85% they don’t spend on allowables will have to be refunded to the policy holders.
Simply put, this is the end of the beginning of the long track to single payer health care.
So, can private health insurance companies manage to make a profit when they actually have to spend premium receipts taking care of their customers’ health needs as promised? Not a chance-and they know it. Indeed, we are already seeing the parent companies who own these insurance operations fleeing into other types of investments. They know what we should all know – we are now on an inescapable path to a single-payer system for most Americans and thank goodness for it.
Let us realize the arc of the moral universe is long but it bends toward justice — Martin Luther King