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December 17, 2011 08:33 PM UTC

Mike Coffman Loves Him Some Health Insurance Profits

  • 27 Comments
  • by: Colorado Pols

Here’s a news release from earlier this month from the Department of Health and Human Services, announcing the scheduled implementation of an important provision of the Patient Protection and Affordable Care Act (so much easier to just call it “Obamacare”):

Today, the Centers for Medicare & Medicaid Services (CMS) issued a final regulation that will ensure health insurance companies spend at least 80 percent of consumers’ health insurance premiums on medical care, not income, overhead and marketing. Insurance companies that fail to meet the new standard are required to provide a rebate to consumers.

Known as the Medical Loss Ratio (MLR), this rule provides unprecedented transparency and accountability of health insurance companies for customers. Created by the Affordable Care Act, the MLR requirements provide protection and value to approximately 74.8 million insured Americans. Estimates from last year indicate that, starting in 2012, up to nine million Americans could receive rebates worth from $0.6 to $1.4 billion. However, early reports suggest insurers lowered premium growth rather than face the prospect of providing rebates – a win-win for consumers.

“Under the Affordable Care Act, consumers are already seeing better value from their health insurance companies,” said CMS Acting Administrator Marilyn Tavenner. “If your insurance company doesn’t spend enough of your premium dollars on medical care or quality improvement this year, they’ll have to give you rebates next year. This will bring costs down and give insurance companies the incentive to focus on what matters for patients – high quality health care.”

Sounds pretty good, right? Not if you’re Rep. Mike Coffman of Colorado, who issued his own press release yesterday:

House Small Business Investigations, Oversight and Regulations Subcommittee Chairman Mike Coffman (R-CO) today held a subcommittee hearing to examine new Patient Protection and Affordable Care Act’s (PPACA) Medical Loss Ratio (MLR) and its effect on job creation. Some have argued that the MLR requirements will ensure that customers receive the most value for their premium dollars. However, insurance agents, [Pols emphasis] many of whom are small business owners and whose customers are often small businesses, believe that the MLR requirements may lead to lower levels of customer service and consolidation in the industry– which will result in job loss…

“President Obama claims the new healthcare reform law will decrease healthcare costs for Americans,” said Coffman. “However, the new Medical Loss Ratio included in the law may have the opposite effect by forcing insurers to increase– not decrease– premiums, because insurers will be discouraged from investing in administrative services, such as anti-fraud or anti-waste services, that could save consumers money. On top of this, the MLR may have a domino effect on small insurers by deterring many from entering the market, cutting the wages of current insurance brokers or forcing them out of business.

“The MLR is bad policy and bad for small business. With over 13 million Americans still unemployed and our economy still wavering, any law that comes from Washington should be facilitating growth– not increasing prices on consumers or killing jobs like the MLR will do.”

We haven’t seen any numbers yet for the effect the new medical loss ratio (MLR) rules will have on Colorado’s health insurance market, but the Miami Herald said yesterday that in Florida, “large numbers” of insured residents could be getting premium rebates from insurers do not comply with the 80-20 ratio of healthcare expenses to overhead.

Politically, once again especially for Rep. Coffman in his new hotly competitive district, opposing the medical loss ratio requirement in “Obamacare” makes very little sense. This component of healthcare reform is one of the more popular aspects of the new law in polls that actually break down what it does. The arguments against it are kind of stilted, essentially boiling down to fewer insurance agents due to less commission earned on sales–a “problem” that many other parts of the reform law address, such as state-based health insurance exchanges.

And we have to say, the health insurance brokerage industry is a terribly small constituency in CD-6 to focus your time on compared to health insurance consumers.

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27 thoughts on “Mike Coffman Loves Him Some Health Insurance Profits”

  1. Everything Coffman claims is conjecture, it hasn’t even happened yet. The MLR addresses the fat in the system, which is why we are now spending about 16% of GDP on health care while other industrialized countries with universal single payer systems are at 10 – 12 % of their GDP.

    Coffman needs to deal with the facts rather than his talking point projections of what might happen.  

    1. However, insurance agents, [Pols emphasis] many of whom are small business [GL question mark] owners and whose customers are often small businesses, believe [GL emphasis]that the MLR requirements may lead to lower levels of customer service and consolidation in the industry– which will result in job loss…

      Coffman kneels at the crotch of insurance biggies and their watercariers. Well, I T-bow to this:

      Let’s see–US population: 310,500,000. Citizens protected: 74,800,000. Percentage? Let’s see–divide 74,800,000 by …. Hmm. Move the decimal point, get rid of some zeros. Hmm, 2. Now, let’s see: 2 times 3,105 is 6,210. And 3.whatever goes into 6.whaever how many times? Hmm: about 2? Yup. Rmainder? not much. So 2.3 or so percent of American citizens benefit from this one [GL emphasis] provision of Obamacare.

      Holy crap! That’s more than the precious, must-be-protected-at-all-civic [GL semi-emphasis]-cost, holy, holy, holy 1%. [GL emphasis]

      Socialism! Dirty fucking hippies! The Democrat Party and their whiney librul George Soros special interest anti-Amurican (especially those sniveling 2.3 percenter) special interest enableds!

      Or, much simpler: Forget the percentage. Seventy-four million, five-hundred thousand Americans [yeah, GL emphasis] received protection. Obamacare, and we, done good. [just about anybody that knows shit emphasis ]

      Screw Coffman and the asses he thinks he’s going to ride in on. He and they can believe all they want. Allyn, you’ve got the numbers. Thanks.

      Now, CD6-ers: Go get ‘im. [see previous emphasis reference]

  2. This could well drive a lot of insurance brokers out of business. It will definitely eliminate some jobs as that savings comes from hiring fewer people.

    But Rep Coffman should be celebrating that. Because that reduces what we all pay for health insurance. And for companies like mine which pay most of this cost, it means we have money to hire additional people.

    This does not eliminate jobs, it shifts them to more productive parts of the economy. But apparently Rep Coffman prefers a less efficient system, to the disadvantage of everyone else.

    1. Seventy-four million, eight hundred thousand American citizens will benefit. Will be able to hold onto their jobs? Will be able to contribute to the economy?

      Screw a lot of insurance industry bloodsuckers. The whole lot. They all–from secretery and mail clerk on down to the internal auditors and CEOs–cling to the arteries of the suffering or about-to-be suffering. They don’t earn a dime of their their existence. Society–our society–doesn’t need them. Neve did. Never needed snake oil, either.

      It’s time we moved on. Leave them and their obscene business models and greed to another, past, capitalistic model.

      1. Don’t you believe the notion that my health care is improved because the CEO of United Health Care makes $75,000,000 a year?

        “Health in Numbers”…my ass.

  4. It’s a scandal that a “conservative” public official would defend the status quo of the insurance industry by trying to protect the disgusting bureaucratic inefficiencies that are rampant in U.S. insurance companies.

    If they stand in the way of citizens getting proper health care (while driving up costs), then the government absolutely should step in.  

    1. OMG.

      Another Democratic Socialist in the making?

      I can only hope.

      Psst: Please don’t start advocating folks start living/voting their own self interests. They might end up getting the government/society they deserve. They might even live in a society of financial security and personal confidence. Shhh. Don’t spread it around.  

  5. in the individual/small group market, not the MLR.  Brokers serve as a middle man between the consumer and the companies in comparing, applying for and obtaining health plans, for which they receive a commission.  The exchanges are set up to allow the consumer to do that on their own without the added administrative cost.  This is essentially the natural progression of the process that was started by the acceptance of e-signatures and the advent of direct electronic application some years ago.

    The brokers who deal with large groups and/or those that can position themselves to act as a TPA/actually provide customer service after the sale will most likely find their services still in demand.  

    Evolve or perish.      

    1. lots of overpaid middlemen who add nothing but cost to healthcare are fine and job creating. It’s only government workers, such as teachers, fire fighters, police, postal workers, social workers, librarians, the folks who keep public rec centers, pools and such going, you know, the people who make up the middle class and provide all the service civil society requires to exist and do it for modest pay, who are just a waste of space and money.

      As for the lower level insurance workers,  greatly expanded universal medicare would open up some public sector jobs for them and the vibrant economic growth we could expect if employers no longer had to  be burdened with healthcare costs would create more jobs for people with their general skill set as well. Coffman’s argument is kind of like arguing that we shouldn’t have switched to automobiles because jobs would be lost in the carriage industry.

      1. Don’t forget those lazy, overpaid state workers who have the nerve to make sure that insurance companies actually follow the law–like paying claims, providing the services promised when they take your money and the like.  

        An expanded public option would probably put some them out of a job (good!) but would also provide other public sector opportunities for them (bad!) and we can’t have that now can we.  

        Funny that the auto/carriage comparison is what also came to my mind.  

         

  6. That’s Mike Coffman for you — defending the larded-up profits of his insurance buddies.  Who needs computers when you’ve got secretaries and perfectly good filing cabinets?

    Even worse, he’s falling out of step with the rising GOP star, Paul Ryan on the subject:

    And here’s the kicker: Wyden-Ryan has a public option to boot, because fee-for-service Medicare would remain an option for seniors. If you’re with me, Ryan is now on record for the Affordable Care Act model, more generously funded than was his previous plan, with a public option. But just for seniors. Oh, and for workers at small firms representing a third of America’s total employment. Paul Ryan is so close to universal coverage he can almost taste it!

    The Wyden-Ryan framework is a daring and risky proposal for both the GOP and Democrats.  

    Here’s columnist Matt Miller’s take on it:

    But the gig’s up. Wyden has put Ryan in a box where he can be forced to admit that there’s no way to get our long-term fiscal house in order without higher taxes as the boomers age. (I know it must seem crazy to get excited about forcing a politician to admit the obvious, but that’s the kind of breathtaking intellectual dishonesty on taxes we’ve been dealing with). If the media are smart and persistent enough to force this question of Ryan’s endless debt, Wyden will have set in motion a Republican “uncle” on taxes that could fundamentally alter policy debate in the years ahead.

  7. Wha the fuck is a “small business”?

    The IRS and the SBA have wholly different criteria. Politicians? Who the hell knows wht their reference is?

    Now, when I think “small buainess”, I think (Don’t ask me why. I don’t know. Maybe it’s from my past.) a stand-alone shop of maybe 50 people or less–even down to the owner who’s the sole emloyee–with a taxable income of somewhere around $250,000 or $300,00 a year.

    So, reporters, POLs, et.al.: when you blithely, stuporforically, say, “small business”, or “small business owner”, what are you saying? To put it another way, What the fuck do you mean? Small business?!

    There, you made me do it again; an exclamaton point. I’m going now. To wash my typing fingers. (The other 12 are still chaste.)

    1. and those even smaller are the ones I think about Larry when the tax cut discussions are going on. THESE small business owners benefit greatly, as do their employees, with the payroll tax holiday. I know it can’t go on indefinitely but it can go on as long as there is a pay for. I’ll even say the others can go on as long as there is an acceptable pay for. But, cutting medicaid and social security is NOT an acceptable pay for, especially to pay for a tax cut for the 1%.

      1. Small software companies (like mine) pay well, are mostly profitable (or have V.C. money), and can afford to have the tax holiday end. Plus our industry is booming.

        On the flip side, there are large companies in industries that are struggling where a tax holiday has meant more jobs. And they have a large number of low-paid employees where that extra 1K/year from the payroll tax reduction is a big deal. (I’m taking 2 different tax holidays in this para.)

        I’m happy to take any breaks thrown my way. But I don’t think small business equates to best recepient.

      1. Is that the way the public is expected to feel about insurance brokers, and not care about their interests because they are unpopular, is very similar to arguments made about slaves. And historically, arguments in favor of slavery in America were almost exclusively made by Democrats. Do you disagree?

        1. I’m sorry, but that’s getting pretty close to Godwin’s Law.

          That insurance agents may be headed the way of telephone operators shouldn’t be a big surprise to anyone in this age of web-based self-service apps.  Spending 16% of GDP on healthcare means we’ve got way too much overhead.

          I can’t remember the last time an insurance agent took my pulse or gave me a flu shot.  And I’d prefer that my doctor not spend all his time filling out paperwork.

        2. And why should I use one?

          I have no animosity toward them, but the last time I used an insurance broker was probably 20 years ago. They were working toward being an anachronism then; with the advent of price quote tools on the Internet, they’re almost redundant now.  If I had my way with insurance regulation, they’d be nigh-on useless because every insurance entity dealing with standard insurance products would post standardized, easy to understand rates.  (Obviously doesn’t apply to the luxury market where e.g. famous people can insure whatever it is that makes them famous…)

            1. Mostly because they have access to tour packages and things that aren’t generally available through other channels.

              I don’t usually use travel agents, because I’m not usually looking for a packaged tour and can find what I’m interested in without an agent.  But we went with a group through an agent for a recent overseas trip…

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