A "medical loss ratio," sometimes also reported as a "minimum loss ratio," is a requirement that in the future, health Insurance Companies and Plans will spend more money on actual health care costs than they pay themselves for their own costs. Reportedly, the National Association of Insurance Commissioners has expressed concern that Health Insurance Companies will quit entire markets rather than adjust their spending any time soon to meet this new requirement. See Robert Pear, "Seeing Threat to Individual Policies, State Officials Urge a Gradual Route to Change" p. A16, col. 1 (New York Times Nat'l ed., Tuesday, June 15, 2010).
Together, let's see if we can understand this concept. If Health nuts cannot gouge, they will quit the business. Not a good business model.
Why is it, he asked rhetorically, that Health Insurance Companies provide so much ammunition so often to advocates of a single-payer system in which there are no longer any Health Insurance Companies? Can it be, perhaps, that that is an unintended result of their own business model?
The Author is Co-Chair of the American Bar Association Subcommittee on Health, Life and Disability Insurance of the Litigation Section.
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