by Carmen Balber/California Progress Report
Reporters largely missed the point of a Commonwealth Fund study released last week, that looked at consumer savings under Obamacare’s 80-20 rule, the rule making insurance companies spend at least 80% of your premiums on health care, not overhead.
The authors started with a fact we already knew – that health insurance companies had to pay $1.1 billion in rebates for missing the MLR requirement in 2011 – and that big shiny number distracted the news media. But the authors zeroed in on a much more important fact. Insurance companies successfully reduced administrative costs by $1.184 billion in 2011, but they used those savings to increase profits instead of passing them on to consumers.
Clearly the 80-20 rule isn’t working to contain profits and hold down premiums, especially in states that don’t have tough regulation of insurance premiums. [Read more…]











