Obamacare forces insurers to give voters cash 3 months before election

Obamacare will force health insurers to pay up to $1.4 billion in insurance rebates to 9 million voters just three months before this year’s general election.1

Obamacare, and its implementing regulations, now require individual and group health plans to spend no less than 80% to 85% of every premium dollar they receive on “health benefits.” This percentage is called the Medical Loss Ratio (MLR), and insurers that spend less than the minimum MLR are required to issue rebates to their policy holders.

By this June, insurers must report to the Obama Administration what their MLR was for 2011, and they must issue any required rebates by August 1, 2012—just three months before the 2012 presidential elections.

Texas insurers alone are expected to pay out nearly half a billion dollars in rebates over the next three years.2

Come this June and August, there are several things you won’t hear from the Obama Administration about Obamacare’s MLR mandate on health insurers.

You won’t hear from the Obama Administration how the MLR mandate has made it more difficult for health insurers to prepare for the “lean” years by building reserves in the “fat” years.3 Because in the “fat” years, health insurers will have to issue rebates. Small insurers will find it harder to compete against larger insurers, and the result for consumers will be fewer insurance options.

And you won’t hear, that the MLR mandate, gives insurers disincentives to continue offering market-friendly, low-cost, high deductible health plans, including those with Health Savings Accounts.4

The administration won't tell the stories of health insurance agents who have lost their jobs or who are not able to provide quality service to their clients because of Obamacare’s MLR mandate. Under the business-model Obamacare forces on health insurers, insurers are no longer able to pay agents what they’re worth to consumers. The only option these agents have is to reduce the levels of service that they used to provide to their clients.

Instead, this June and August expect to hear from the Obama Administration how Obamacare has helped you, the consumer, by forcing insurers to pay you rebates.

1 http://www.healthcare.gov/news/factsheets/2010/11/medical-loss-ratio.html
2 Becca Aaronson, Feds Reject Texas’ Request to Delay Insurance Reform(Jan. 27, 2012) available at http://www.texastribune.org/texas-health-resources/health-reform-and-texas/feds-reject-texas-request-delay-health-reforms/.
3 http://obamacarewatcher.org/articles/347
4 Id.