Another good reason to pass the health-care bill

• December 20, 2009
• 1 comments
• Posted in Health Insurance, Latest Posts

The bill proposed in the Senate would require health insurance companies to spend a least 85 percent of each of your premium dollars on medical care. Right now, most insurers spend less than that, especially for people with individual or small- group coverage. As little as 64 percent of the premiums you pay might actually be spent on medical care, according to a 2008 study of the leading companies by the Senate Commerce Committee. The rest goes for marketing, profits and overhead—including the hoards of employees who spend their days and nights thinking of ways to cut people off.

At present, there’s a positive incentive for insurers to limit the amount of medical bills that they’re required to pay. The less they pay, the more profitable they can be. If the 85 percent provision passes, the companies would find it harder to play this game. They’d even be forced to become more efficient, which ought to slow the increase in your premiums, too. Among other things, insurers could fire all those people hired to say “no.”

Tags: health insurance companies, health insurance reform

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