Minimum Loss Ratio

The Obama administration just released another set of regulations, the “Draft Notice of Benefit and Payment Parameters for 2014.”

Among many other things in the 373 pages, they have announced their proposed assessments to cover the cost of running the federal exchange.

In order for the feds to administer the new insurance exchanges, they have proposed a fee of 3.5% of premium on each insurance policy sold in the exchanges (page 224).

This from the Kaiser Foundation 2011 “Primer” on Medicare:
“The costs of administering the Medicare program have remained low over the years––less than 2% of program expenditures.”

Many times over the years I have heard from advocates of a single-payer Canadian-style health plan that Medicare proves the federal government can do it cheaper than the private sector and should therefore take it all over.

So much for the notion that the feds are the model of insurance efficiency.

Under the new health care law’s Minimum Loss Ratio (MLR) provisions, insurance companies are limited to no more than 20% of premiums for expenses in the small group and individual markets.

Continue reading “Inside Baseball: Getting the Federal Exchange Right”

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