Snap Fact #149

ObamaCare Ensures That You Are getting the most care from your premium dollars!
Abstract

Today's benefit is one of the most important yet least known aspects of the Affordable Health Care Act. If you have any doubts about the overall merit of this 2000 + page document you need look no further than reading below to understand how the Affordable Care Act benefits you and your fellow countrymen. 

The Affordable Care Act (ACA) includes several provisions that change the way private health insurance is regulated in an effort to provide better value to consumers and increase transparency. One such provision, the Medical Loss Ratio (or MLR) requirement, limits the portion of premium dollars health insurers may spend on administration, marketing, salaries, bonuses, and profits. Under health care reform, health insurers must publicly report the portion of premium dollars spent on health care and quality improvement and other activities in each state they operate on a new national consumer website – HealthCare.gov. 

Beginning in January, 2012, the Affordable Care Act requires individual and small group insurers to spend at least 80% and large group insurers to spend at least 85% of your premium dollars on direct medical care and efforts to improve the quality of care you receive – and rebate you the difference if they fall short. This will limit spending on overhead and salaries and bonuses paid to insurance company executives and provide new transparency into how your dollars are spent. 

Insurance companies must calculate and report their MLR, and how rebates will be distributed, effective January 3, 2012. Among other things, the rule: provides that MLR rebates will be issued in a way that is tax-free to consumers and expands the MLR information that insurers must provide to consumers. This means that the actual care that patients will receive and the fairness of settlements will tilt the playing field back in our favor.    The days of outlandish behavior by the insurance companies is over and a reasonable government regulation will protect all consumers of their products from anything-we-say-goes attitude of the companies.   If they fall short they must write checks to all of their clients to make up the difference.

On the other side of the financial spectrum, there is good reason to believe that the ObamaCare Health Act will reduce another great strain on the financial well being of families and of society as a whole: 
Medical Expenses*

A study done at Harvard University indicates that medical expense is the biggest cause of bankruptcy in the U.S., representing 62% of all personal bankruptcies. One of the interesting caveats of this study shows that 78% of filers had some form of health insurance, thus bucking the myth that medical bills affect only the uninsured.
Rare or serious diseases or injuries can easily result in hundreds of thousands of dollars in medical bills - bills that can quickly wipe out savings and retirement accounts, college education funds and home equity. Once these have been exhausted, bankruptcy may be the only shelter left, regardless of whether the patient or his or her family was able to apply health coverage to a portion of the bill or not. This is not only a personal tragedy for the individuals and families involved, but the burden of the unpaid medical costs, including legal and collection fees, are ultimately shifted to the tax payer in the end. 

Summary

During the last week we've examined how the Affordable Care Act benefits so many of our citizens. We began this SUPER SNAP-CAP series with the caveat that this bill could have been a lot better but we wanted to focus on the many benefits of the bill so we could see how it advantages us in spite of the drawbacks. 

One of the great ironies of this bill is that the Republican Congress, and several Blue Dog Democrats forced many changes, compromises, and amendments that substantially weakened the bill. Perhaps the most cynical and effective of these ploys is a central issue that is now before the Supreme Court. In order to avoid single payer, the Republicans brought in the idea of the mandate wherein everyone must participate. This is the very issue that they have now turned around and are trying to defeat the bill with in the Court.