General Discussion
In reply to the discussion: Remember when I said the mandatory health insurance provision in the ACA was bad news? [View all]alc
(1,151 posts)It could work like the Republicans explain the free market and companies compete for customers on price/service/etc. But, with guaranteed customers and difficulty for new alternatives to the few companies, they may be happier to split up the market and make more off of their chunk.
The medical loss ratio is worse for premiums. By one reading, they have to spend about 80% of premiums on medical cost. Another interpretation is that their profit is about 20% more than medical costs (10-15% after admin costs). So, the best (and only) way to increase profit is to raise medical costs and raise premiums. They politely returned the extra profits this year. But I'd bet they will jack up medical costs, then use their good behavior this year to argue that they "need" to up premiums every year from now on because medical costs "went up". Never mind that they start approving more unnecessary tests and non-generic meds and don't negotiate rates very well. If regulators object, they'll publicly ask which tests/meds/visits that are now provided because of ACA that the government would like them to stop covering. We'd better hope the regulators do better than with financial problems and BP (where the regulations were there but not enforced)