For those who are interested, I wanted to post the actual Health Care Reform Bills.
The first is the Senate Bill which was passed by the House and which the President signed earlier today. This is the current “law of the land”. senate_bill
The second bill is the Reconciliation Bill which was passed by the House and which now will go to the Senate. Since the Senate does not have the votes to block a filibuster, the Senate is looking to pass the bill via “Budget Reconciliation”. Assuming this passes muster with the Senate Parlimentarian (a non-partisan enforcer of Senate rules), this will be passed by the Senate and then given to the President for his signature. If the Senate changes anything about this bill, it will need to go back to the House again. reconciliation_bill
Will the 80% loss ratio apply to individual policies issued before the enactment date?
Scott:
Yes, I believe the 80% includes “Grandfathered” individual policies as well. I’ll have my individual manager check on that, as well.
Craig
Scott:
The 80% applies to the insurers individual and small group overall book of business. This would include policies on the books and those to be written.
Don
[...] 29, 2010 by Craig Last week, I posted the text of the Reconciliation Bill. It’s at the bottom of the blog [...]
[...] Here is a link to the Text of the Reconciliation Bill (at the bottom). See section 1176 on page 1409. [...]
It’s alway’s the agent that gets it up the Kazoo. We shoud all go to DC, in front of the Capital Bldg. and throw our brief cases on a pile and burn them in protest!!!! Trouble is they’d arrest us for arsen!! Or just burn one in protest! If you get my drift!
Thanks for answering me Craig. Someone started a thread on the “Insurance Forum” stating it did. Do you mind if I put your reply on there?
Russ:
I don’t mind at all. I’ll do a little more extensive research on this and get back to you. You probably know that the 85% definitely will apply to Medicare Advantage (assuming reconciliation bill passes, which it will). I would think that I’d have heard about the 80% applying to Medigap by now. Maybe it’s wishful thinking on my part?!? Generally, loss ratios on a good performing individual Med Supp book run in the 70-75% range. Minimum MLR’s on Medigap are currently around 60 – 65% for individual and 75% for group.
Craig
Does this loss ratio apply to med-supps? Individual policies? 80% loss ratio? If so, looks like commissions may be sliced significantly?
Russ:
I don’t believe this applies to Med Supp, at least I’ve heard nothing of this. It would apply to Individual policies in the exchanges for certain. Not sure about policies outside of exchanges. The loss ratio would be 80% for individual health policies which leaves 20% for admin, overhead, profit and commissions.
I can see a change to all Medicare supplements coming down the pike very soon. I wouldn’t be surprised to see some regulations for doctors when treating seniors so that the number of knee, hip, shoulder replacements are much more limited. Also as far as a public option; they aren’t calling it that now, but as some insurance companies face losses and in turn becoming insolvent that either the government will take them over or let them go then make it government ran healthcare in the next few years.
Also as a side note, I think there needs to be much more online about how the current bills will affect insurance agents. There certainly are enough classes online oriented toward sales to attend, and the focus now needs to be on how this is going to affect agents in the field.
thanks for posting the text. i’m confused though…if you search the term “public health insurance” it sounds like there IS a public option. Did the Dems sneaks something in?
P 1167:
“Subtitle B—Public Health
17 Insurance Option
18 SEC. 221. ESTABLISHMENT AND ADMINISTRATION OF A
19 PUBLIC HEALTH INSURANCE OPTION AS AN
20 EXCHANGE-QUALIFIED HEALTH BENEFITS
21 PLAN.
22 (a) ESTABLISHMENT.—For years beginning with Y1,
23 the Secretary of Health and Human Services (in this sub24 title referred to as the ‘‘Secretary’’) shall provide for the
25 offering of an Exchange-participating health benefits plan
I just heard on talk radio that insurance companies are mandated to increase claims expense from 65% to 85% effective very soon. The insurance representative stated this legislation make health insurance companies financially insolvent. Can you verify?
Yes, I believe that there will be a minimum loss ratio of 85% for Individual and Small Group products and a minimum loss ratio of 80% for Large Group products. This essentially turns insurance companies into utility companies!
Craig
Actually it is 85% for large group and 80% for individual & small group
Trey:
Yes, you are correct. Thanks for the correction.
Craig