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Potter: Health insurance needs tougher regulation

Insurers navigate gaps in existing law to charge higher premiums for coverage

I've often said that the Affordable Care Act is the end of the beginning of health reform. It addresses many problems associated with health insurance, but more must be done to control costs and access real universal coverage. And flaws in the law need to be fixed.
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Dec 10, 2012, 6:18 pm
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Okay, I lost the bubble somewhere.  Are you saying that if admin and overhead are lower than 20%, it is not okay to take a larger profit, up to 20%?  If costs are reduced to 15% from 18%, you expect the 3% to be returned to the customer?  Or if admin costs are 19%, premiums will be raised so that they are only 17 or 18% of the new premium leaving more than double the previous 1% available as profit?
If my premium is 100 a month, I get 80 of health care and the insurer gets 20 to pay for costs and profit.  Let’s say costs are 19.  So the insurer raises the premium by 10 to 110 a month.  Now I get 88 in health care and the insurer gets 22 to pay for costs and profit.  Since costs are 19, instead of one dollar profit, they now get 3?  But I get 8 more in health care.
On the other hand, if costs are 15 a month on the 100 premium, the insurer banks 5 instead of dropping my rate by 2 to 98.  (giving me 78.40 in health care and them 19.60 in costs and profit.  15 in costs give them 4.60 in profit.)  There is little sense in giving me the 2 because I stand to lose 1.60 of health care.
A little help in understanding why more regulation is better in this case?

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