Submitted as a Letter to the Editor:
Recently, Blue Cross had planned to increase insurance premiums by 39% to thousands of customers without an explanation despite record profits of $4.7 billion last year with 1.4 million fewer customers. The reason that Anthem Blue Cross can declare such an increase without having to issue an explanation is that there are no rules governing rate increases.
There are provisions in both Congressional Health Care Reform Bills to rein in the so-called “medical loss ratios,” how much of the premium moneys insurance companies can spend on non-medical expanses (marketing, commissions, CEO salaries).
In the very distant past, the medical-cost ratios have been high 90-10 (90% of the premium money is spend on patient care and 10% on overhead). The ratios have decreased dramatically over the last 10 years. When shifting the ratio is not enough to keep the profits high, the next logical thing for insurers is to increase the premium. It is simple mathematics. Knowing how much your premium money is spent on overhead helps understand partly why health care costs continue to sky-rocket, unless reform is achieved.
Donald Nguyen, MD, FAAP
Ohio State Director for Doctors for America
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ABOUT US:
We are fighting for provisions to help more patients get the care they need and to limit the power of insurance companies. Doctors for America is a grassroots movement of over 16,000 physicians and medical students in all 50 states.