Download PDF Report >>> Insurers’ Efforts to Shift Admin Costs
Senator Rockefeller recently came out with a report cautioning about health insurers efforts to shift Selling, General and Administrative (SGA) expenses to medical costs. A shift would increase medical loss ratios (MLR) allowing insurers to keep more earnings. Two uncertainties affect predictions. First is how plans are grouped and second is how one computes “medical costs” and “premiums”. Below are reasonable interpretations of the new law that favor consumers, not insurers.
HOW ENROLLEES ARE GROUPED
The first order is to define “group.” The more groups are combined, the greater the opportunity for balancing out gains and losses, which is the whole idea of insurance. Continue reading
Filed under: Analyses, Health Costs, Health Insurers, Health Quality, Healthcare Reform, MLR - Financial Ratios | Tagged: bad blocks of business, federal mandate, large groups, medical costs, medical loss ratio, MLR, Premiums, profitable business, R&D, Selling General and Adminstrative, Senator Rockefeller, SG&A, Small groups | Leave a comment »