Tuesday, December 20, 2011

Rogers Defends Health Insurers that Waste Half of Premiums

Who in their right mind would defend bloated bureaucracy and overhead so high it eats up almost 50 percent of every dollar taken in? Why, Rep. Mike Rogers, of course.

The Brighton Republican is lining up to defend health insurance companies selling policies to Michigan residents that spend as little as 52 cents of every premium dollar on health care to policy holders.

The Detroit Free Press, in an article Tuesday, reported that Michigan had tried to wiggle out of a provision in the health care reform act that says insurers must spend 80 cents out of every premium dollar on health care. Only 20 cents can be spent on administration, including multi-million-dollar salaries to their CEOs.

Rick Snyder's administration wanted to phase in the rule, claiming it was so hard to meet that the companies might stop doing business in Michigan. But the Obama administration rejected Michigan's bid for an exemption from the 80-20 rule, saying there are many carriers selling individual policies who meet the rule and that the insurance market would remain stable and competitive.

Rogers, rather than standing up for his constituents who buy health insurance, jumped to defend insurance companies. He didn't explain why it was a good deal for his constituents that up to 48 cents out of every premium dollar they paid is wasted on something besides medical care. But he said it would be bad if companies that suck up money in that way decided to stop selling policies in the state.

According to the Free Press:

"Insurers and their subsidies falling short of spending 80 cents on care, based on 2010 data, were Golden Rule Insurance (United Healthcare), spending 60% of each dollar on care; Time Insurance (Assurant), 65%; Aetna, 70%; Humana, 70%; and World Insurance (American Enterprise) 52%."

How hard is it to meet the 80-20 rule? Blue Cross Blue Shield of Michigan manages to spend 93 percent of each premium dollar on medical care and just 7 percent on administration. For the federal government's Medicare program, the figures are more like 98 percent and 2 percent.

Under the law, companies that spend more than 20 percent of premiums on administration owe rebates to their customers starting in August. The newspaper reported that "rebates owed to customers would be Golden Rule, $10 million; Time, $5.3 million; Aetna, $1.7 million; Humana, $1.3 million; Priority Health $200,000, and MEGA at $2.6 million."

When those checks come in the mail, thanks to health care reform, I hope they include a notice that Mike Rogers thinks consumers don't deserve them.

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