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Letter: The 80/20 rule

In September 2012, my elderly father passed away. So I was surprised and puzzled when a check for him arrived in July 2013 for $1.92.

It was from his Medicare supplemental health insurance company, CareFirst BlueCross BlueShield of Maryland. An accompanying letter explained that, as required by the Affordable Care Act (aka Obamacare), this rebate represented unspent premiums. More precisely, the “Medical Loss Ratio” standard in the law requires health insurance companies to spend at least 80 percent of the premiums they collect on client health care services. If they don’t, they must rebate the difference instead of spending it on “administrative costs such as salaries, sales and advertising.”

While this 80/20 rule seemed like a good idea – requiring that premiums be spent on health care rather than executive bonuses – I didn’t think it was a big deal. After all, it was only $1.92! Then I learned that at the same time, more than 6 million other people had also received rebates totaling more than $8.5 billion. As they say, pretty soon, you’re talking about real money.

The 80/20 rule is another positive feature of the ACA that the Monitor neglected to mention in its March 10 editorial (“Another Obamacare delay”). And it’s another reason why the ACA will become increasingly popular as more and more people discover its benefits, as I did.



Legacy Comments4

The problem is that someone actually thinks it is the job of big bloated government to tell a private company what they can and cannot do. Govt is in the business of providing those goods and services that the private sector finds unprofitable or undesirable. PERIOD. Govt has no business telling a company or a person what it must do regarding private health insurance. We own the Govt and it is well past the time to reign it back in and return it to its duties as outlined in the constitution

Do you think the government should be in the business of educating our children? What about providing public safety - fire and police? Highway maintenance? Snow plowing? Child protection? Elder protection? State and National parks? What is the difference between these things and health insurance for all? Any of those things could be turned over to the public sector and someone would make a profit, I'm sure. The problem is that we've gotten so used to the idea of private health insurance that people can't see that it's really just like public education and public safety - something that everyone needs, uses, and makes the country a more civilized and profitable (yes, profitable) place. A healthy workforce, just like an educated workforce, is a boon to business.

I think that communities should be in the business of educating our children. Yes, public safety, police and fire should also be handled at the community and state level. Snow plowing, elder protection, child protection, parks, of course. Health insurance is not like any of those things. What happened to a woman's body and that being between her and her doctor. Well, we don't want government involved in that but in the lives of others, it is OK. We don't want the government involved in our bedrooms but progressives want to inspect our homes, decide what people eat, tell us how we ought to live, etc. Education is always a progressive argument. Much of the workforce is not educated and can't be it seems. It is not he place of government to determine what a woman does with her body and it is not the place for goverment to determine what ANYONE does with their body. Period. Get the Hell out of my health, it's personal.

I hit reply too quickly. To finish my thought: We could easily resolve your issue by taking insurance totally out of the hands of private business, then the government would not be telling them what to do. Problems solved.

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