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Hammering Out the New Health Care Rules

Although health care reform has been technically enacted, the laws to really make it happen are still being written. One provision in particular has the insurance companies doling out money to their lobbyists to achieve maximum flexibility in the interpretation of a key provision.

So, which one is it? The one that most directly effects their bottom line. Under the new law, 80 cents of every dollar collected for premiums must be spent on the welfare of the patient. Sounds good to the consumer and makes the insurers reach for the nearest antacid.

So, are these two things equal in terms of their application to a patient’s welfare?

(1) Investigations to find and exclude doctors who perform fraudulent operations from the insurer’s network.

(2) Paying for programs to help diabetics maintain their conditions and avoid emergency room visits.

Weighing these kinds of moral and financial apples and oranges create a major concern for the insurers and for the state regulators currently drafting the rules to enact the health care law.

If insurers spend too much on administrative costs, they will be legally required to refund money to their policyholders. However, if they don’t do everything they can to have their administrative costs covered by their primary source of income — premiums — their profit margin drops.

Most advocacy groups see the industry’s current lobbying efforts as an attempt to shove as many administrative costs under the patient care umbrella as possible. It’s tempting to paint that as evil and grasping, but its more reasonable to stop and consider that from their side of the equation, insurance is a business, one that is being redefined and reshaped by a law not of their making or that did not have their widespread support.

In the coming mid-term elections, these are the fine points of insurance and health care reform concerned voters would do well to track. It is on this battleground that compromises and antagonisms that will affect what you pay for coverage and care will be created. It’s not the kind of “glamour” issue about which candidates like to talk, but it is one with major long-term implications for consumers.

(For a fuller examination of the arguments on both sides, see the July 23,2010 article by Reed Abelson in The New York Times entitled, “For Insurers, Fight is Now Over Details.”)

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