Stanley Feld M.D.,FACP,MACE

President Obama has done nothing about Tort Reform. Either he does not believe tort reform is part of the healthcare systems’ cost problem or the lobbyist for the plaintiff’s attorneys have gotten to him and the Democratic Party.

He humored Republicans when they brought up tort reform up at his “bipartisan” healthcare summit last year. He said he would take tort reform under advisement and think about developing some pilot programs.

Previously, I mentioned that I am not a Governor Rick Perry (R Tx) fan for several reasons. Lately, he has come up with some practical ideas. He could convert me.

In 2003, Rick Perry and the Texas legislature unenthusiastically changed tort reform laws in Texas. The revision has changed the liability climate in the state for businesses and physicians. Texas rewrote everything from class-action certification to product liability. One big success was eliminating the asbestos-silica litigation scam.

Rick Perry and the Texas senate rewrote the medical malpractice laws, ending plaintiff attorneys’ practice of venue shopping for friendly judges. They also put a cap of $250,000 on noneconomic damages like pain and suffering.

These reforms have been great for the legal climate in Texas. The reforms limited plaintiffs attorneys profitability on frivolous liability claims. Texans believe that because of these reforms and the lack of a state income tax, Texas is the country’s best state for job creation.

Before tort reform, Texas was considered the state in which to initiate law suits of all kinds. We had the “Kings of Tort” in Texas. Medical malpractice rates have fallen by 27.5% on average since 2003. It is no longer profitable for malpractice attorneys to file a frivolous law suits. The result has been a 60% increase in the number of doctors applying to practice in Texas. The overall population of the state has only grown 14%. Texas no longer has a shortage of obstetricians or emergency room physicians.

Rick Perry has been impressed with the results of his tort reforms. He now wants to extend his state’s impressive tort reform record.

Mr. Perry is proposing a British-style "loser pays" rule, which would require plaintiffs to pick up the legal costs of their targets if they lose their suits.

Almost all of America’s economic competitors in the world follow this standard. “Losers Pay” as a deterrent to law suits decreases the cost of doing business resulting in lower prices and a competitive advantage for business. “Loser Pays” would deter junk lawsuits.

Trial lawyers and their Democratic codependents have blocked states from making this revolutionary improvement to U.S. civil justice.

It would add an extra disincentive for the tort industry to bring suits that Texas law already defines as "groundless." The lawyers and firms that file such claims would pay an additional penalty, a downside they would have to weigh against their chances of personal enrichment.

The previous changes in malpractice reform have helped end the Texas physicians shortage in rural areas.

“Twenty-three counties now have their first E.R. doctor, 10 their first OB-GYN. Hospitals are reinvesting the malpractice savings in scarce services like neurosurgery and neonatal units and expanding access to care.”

The earlier success in Texas with tort reform has opened the eyes politicians and produced advocates in Oklahoma. Even Democrats have been forced to agree to some legal reform. The lawyers are lining up to fight the “loser pays” initiative. Limits on damages have worked wonders for the state economic growth in Texas.

“Loser pays” will increase job growth and economic development even further.

Republicans picked up 16 governorships and at least 675 state legislative seats throughout the nation in November. The new state governments are looking at the progress in Texas. They are starting to follow Texas’ lead.

America will not need President Obama to do the right thing regarding tort reform. The states will get America out of its damaging litigation mess.

The opinions expressed in the blog “Repairing The Healthcare System” are, mine and mine alone.

Stanley Feld M.D., FACP,MACE

The healthcare insurance industry is preparing to capitalize on a $40 billion opportunity to run Medicaid plans for states when President Obama’s healthcare reform act adds 16 million people to the Medicaid roles in 2014.

Do the math. $40,000,000,000 divided by 16,000,000 people is a net profit of $2,500 per patient after expenses.

“Medicaid, the state and federal program for the poor, has become a growth area for big insurers.”

Citigroup research group estimates that presently the overall healthcare insurance industry’s net profit is about $56.5 billion per year. The addition of 16 million enrollees will add $40 billion dollars in net profit to the healthcare insurance industry’s bottom line.

The positioning of both major healthcare insurance companies and smaller companies has been proceeding quietly, as they want to stay below the radar of public detection.

California will have 2 million new enrollees. Texas will have 1.9 million enrollees.

The healthcare insurance industry is preparing bids to provide administrative services for each state’s Medicaid program. Most states are experiencing budget crises and find it is cheaper to outsource the administrative services of their Medicaid programs.

“The healthcare insurance industry manage coverage of 70% of Medicaid enrollees, or 33.4 million people, up from 56% in 1999, according to Sanford C. Bernstein.”

States let contracts lasting five years. The states want to contract with vendors now so they do not experience disruptions in 2014 when the Medicaid expansion occurs.

The healthcare insurance companies are trying to customize their plans to win their bids.

“Medicaid is one of health insurers’ few bright spots, as their margins are pressed by regulatory crackdowns on premiums in their traditional policies. Gail Boudreaux, UnitedHealth’s executive vice president, told investors last month that: "The Medicaid space is a significant long-term growth opportunity for us. It’s a big market that’s getting even bigger." UnitedHealth pegs the value of new bids or expansions over the next three years at $40 billion.”

Many healthcare insurance companies are jumping in to capture the Medicaid business. UnitedHealth and WellPoint(Blue Cross/Blue Shield) are at the head of the class. Smaller companies such as Amerigroup, Centene and Molina claim their specialized focus gives them an advantage over the larger companies.

"Understanding the state as a customer is quite different than understanding what GE or IBM want as a purchaser," said John Littel, Amerigroup’s executive vice president of external relations.”

President Obama did not think out his plans for Medicaid very well. His healthcare reform act has done nothing to repair the problems in the Medicaid insurance system. In fact, the funding demanded of the states has resulted in a decrease in funding of vital safety net city and county hospitals.

What remains is an expansion of a system that has failed to provide adequate care over the last 40 years. The defective design of the Medicaid system is responsible for its failure. It makes no sense that by expanding the program by 16 million uninsured people it will produce a successful program. Expanding a failed system will not solve our universal healthcare goals. It will only expand our federal and state deficits and provide more profit for the healthcare insurance industry.

The opinions expressed in the blog “Repairing The Healthcare System” are, mine and mine alone.

Stanley Feld M.D.,FACP,MACE

Rationing of healthcare and restricting access to medical care is here already. It is here even before President Obama’s healthcare reform act goes into full effect. It has resulted from decreasing reimbursement for Medicare services and terrible reimbursement for Medicaid services.

President Obama plans to expand Medicaid to provide services to the uninsured. The states cannot afford to pay for Medicaid at present levels. Adding 32 million people to its roles will lead to a further decrease in reimbursement and further delays in access to care.

Presently, there are not enough physicians accepting Medicaid to take care of the Medicaid patients. When physicians accept Medicaid patients they use physician extenders to help take care of the increased volume necessary to survive the decreased reimbursement. It also raises a government red flag. The result is investigating those physicians for fraudulent billings. This discourages more physicians from taking care of the Medicaid patients.

America is progressing at an unprecedented rate toward increased rationing and decreased access to medical care. I imagine President Obama’s plans to replace physicians with lower levels of “healthcare providers.”

It would be very easy to fix the healthcare system using appropriate measures. I do not think that repairing the existing healthcare system is President Obama’s goal. His goal is to make the entire population dependent on the central government.

It will not work. Wealthy people will always be able to buy most of the medical care they would need. If we stay on the current course, everyone else will experience long lines, decreased access to care and rationing of care.

President Obama, through regulations could try to mandate that all physicians see all patients as a condition for renewal of their medical license.

This would represent government control over individual rights and freedom of choice. It would be unconstitutional.

“The underlying problem is that doctors are reimbursed at different rates, depending on whether they see a patient with private insurance, Medicare or Medicaid. As demand increases relative to supply, many doctors are likely to turn away patients whose coverage would pay the lower rates.”

Medicaid reimbursement is 40-80% of the reimbursement rate of Medicare. Private insurance is higher than Medicare. The preference for patient load is obvious private insurance patients first, then Medicare and finally Medicaid. Physicians are not accepting Medicaid patients and are starting to close their practices to Medicare patients.

President Obama’s new health care legislation is likely to speed this process. Under the new law, tens of millions of additional Americans will receive coverage through Medicaid or private insurance. This will intensify the lack of access to medical care. We have seen it in Massachusetts after the state passed its healthcare reform bill. (Romneycare)

“Ideally, higher demand for medical care would prompt increases in supply, which in turn would lower prices and expand access. But the health care sector does not always work this way.”

Physicians are highly regulated and in that manner restricted in supply. The Association of American Medical Colleges estimates that the United States could face a shortage of 150,000 doctors in the next 15 years.

President Obama probably figures he will add to the supply with substitute physicians. The problem is when people are sick they want a physician.

President Obama’s healthcare law will result in promoting individual private insurance coverage. The plan going to offer subsidies to many individuals that could not afford or obtain private insurance previously.

An unintended consequence is that his healthcare reform act will create incentives for employers to discontinue providing employees’ insurance coverage. Employers’ will pay the modest penalty which will force employees to buy healthcare insurance from federally subsidized healthcare insurance exchanges.

Employees will pay for the healthcare insurance with after tax dollars at a reduced rate. It will reduce consumer spending for other things. The government subsidy will strain the federal health budget even further. The winners will be the healthcare insurance industry and employers. The losers will be consumers and the government.

The American system of federalism, with its checks and balances and slow policy evolution, has many strengths, but it has also helped create this crazy quilt of health care reimbursement rates. The more demand-side pressure is placed on medical supply, the more Medicaid and Medicare reimbursements rates will determine who and what is rationed.

Singapore’s healthcare system is a sort of ideal medical savings account. The government requires workers to save 10 percent of their income for medical care. Consumers pay for medical care from those savings. The government pays for any of the expenses beyond those savings. The Singapore healthcare system has had success in controlling costs and access to care.

Singapore’s healthcare system is a consumer driven system. Consumers become responsible for their care and have incentives to save money for their medical care. The ideal medical savings account system is a cleaner system.

The real issue is there are many things that can be done to the healthcare system to align incentives, decrease abuses and reduce costs.

President Obama’s healthcare reform act is not doing any of them. He is going to make things worse. A healthcare system must be created that will be driven by consumers. We must give consumers incentives to control their health and healthcare dollars.

The opinions expressed in the blog “Repairing The Healthcare System” are, mine and mine alone.

Stanley Feld M.D.,FACP,MACE

President Obama removed the provision in his healthcare reform bill last year dealing with reimbursing physicians for end of life counseling. There was great citizen uproar about this provision. It was viewed by many as a first step toward rationing of medical care.

“When a proposal to encourage end-of-life planning touched off a political storm over “death panels,” Democrats dropped it from legislation to overhaul the health care system.”

Sarah Palin call the provision the creation of “death panels.” A government “panel of experts” would decide whether Medicare would pay for treatment of patients deemed hopeless. The panel of experts would decide regardless of the patient’s wishes.

Sarah Palin’s term was criticized as “sensationalistic.” The criticism is correct. However, in a sound bite society you have to use effective sound bites to get attention. The eliminated provision illustrates the truth about a world of finite resources and infinite entitlements.

Entitlements are ever expanding as our population expands. The government cannot afford expanding our entitlement programs. Yet President Obama’s healthcare reform act is going to expand the Medicare and Medicaid entitlements to cover 32 million uninsured.

One way out is to decrease benefits. This is the administration’s plan.

Another way out of the mess is to attack the root of the problems. America could create a consumer driven healthcare model. America could also develop of system of logical tort reform. Government could subsidize those consumers that qualify for subsidies. Consumers should own their healthcare dollars as outlined in the ideal medical savings account.

I have objected to President Obama’s healthcare reform act. It puts all the power of medical decision making in the hands of the executive branch. HMS and CMS create rules and regulations without congressional oversight. The most recent revelation portends provisions to come.

President Obama’s administration has achieved the same end of life goal by regulations produced by Dr. Donald Berwick chief of CMS, starting Jan. 1.

“At a stroke, Medicare chief Donald Berwick has revived the "death panel" debate from two summers ago.”

Medicare will enact the same policy removed from the bill through the power of regulation. Congress has had no input. This is the first step in a never ending series of future steps President Obama will take to control our freedom to make healthcare choices. The regulations seem benign on the surface.

“The office of Oregon Democrat Earl Blumenauer, the author of the original rider who then lobbied Medicare to cover the service, sent an email to supporters cheering this "victory" but asked that they not tell anyone for fear of perpetuating "the ‘death panel’ myth." The email added that "Thus far, it seems that no press or blogs have discovered it, but we will be keeping a close watch."

President Obama has used a number of trick plays on congress and Americans to further his agenda. One trick President Obama pulled was his appointment of Dr. Berwick during congressional recess without congressional hearing after withholding the request for congressional hearings for 3 months.

Dr. Berwick now slips through a regulation about reimbursement that Congress explicitly rejected. Unfortunately for Dr. Berwick an email was leaked illustrating scheming with his political patrons to duck any public scrutiny.

“Expect many more such nontransparent improvisations under the vast powers ObamaCare handed the executive branch.”

An administrative representative immediately stepped in and declared the rule-making is not coercive. He claimed the rule gives seniors more autonomy, not less.

“The facts are that if the medical experts in Congress haven’t decided that some treatment or service is worthy of the fee schedule, then the program won’t pay for it even if it is in the best interests of patients.”

The two most expensive occurrences are the birth of premature infants and the last 30 days of life. As a society, we will have to learn how to deal with these facts. Society must be innovative in dealing with these tragedies to the satisfaction of all. As a society, we also have to conquer obesity and the onset and management of chronic diseases.

Unfortunately, President Obama’s methodology is wrong. He has demonstrated an arrogance and disrespect for the American people. The American people now understand his methodology. They have experienced his multiple trick plays and have lost trust in him and his administration. There is a perception that he disrespects the will of the people he has been elected to serve. President Obama will not achieve his goals as long as the perception exists.

The Democratic Party has experienced this mistrust during the midterm elections. Nonetheless, President Obama and the Democratic Party continued to show their disrespect for the will of the American people during the lame duck congressional session.

The opinions expressed in the blog “Repairing The Healthcare System” are, mine and mine alone.

Stanley Feld M.D.,FACP,MACE

State constitutions require states to have a balanced budget. Most states have accumulated large budget deficits.

When President Obama promises to redistribute wealth he means it. His plans are to take federal money and bail out states. He has already bailed out Massachusetts. He gave the state $8 billion dollars for its healthcare plan.

California is on the verge of bankruptcy. California has not shown an intention to become fiscally responsible. I assume California is certain President Obama will bail it out. However, President Obama has a little problem. The U.S. has a large budget deficit. The new congress will be in no mood to fund the state deficits. The U.S. is going to have difficulty attracting creditors unless it becomes fiscally responsible.

Medicaid expenses are a big burden on the states. In some states’ Medicaid consumes 40% of their budget. States cannot become fiscally responsible while carrying their Medicaid burden.

President Obama plans to put 60% of the uninsured citizens into state Medicaid programs. At the same time, he is decreasing state allocated funds for Medicaid. The math makes no sense.

Last week Arizona’s Medicaid stopped paying for transplants. Some states have cut Medicaid payments to doctors, paid bills late and trimmed benefits such as insulin pumps, obesity surgery and hospice care. In California, dentists pull teeth that could be saved because Medicaid doesn’t pay for root canals.

President Obama’s healthcare reform plan is causing a rationing of medical care even before it goes into effect.

“Across the country, state lawmakers have taken harsh actions to try to rein in the budget-busting costs of the health care program that serves 58 million poor and disabled Americans.”

“Some states face multibillion-dollar deficits. Federal stimulus money for Medicaid is soon to evaporate. And Medicaid enrollment has never been higher because of job losses.”

Medicaid has become a monster and is eating up the budget in many states.

“In Illinois, Medicaid sucks up more money than elementary, secondary and higher education combined”.

President Obama’s economic stimulus package increased the federal share of Medicaid money temporarily. The economic stimulus money runs out at the end of June 2011. The federal government will go back to paying half the costs of Medical instead of the 60 to 70 percent it pays with the economic stimulus money.

At the same time President Obama’s healthcare reform law requires states not to change the rules on who’s eligible to receive Medicaid. States can no longer act independently to determine Medicaid’s eligibility requirements.

President Obama’s healthcare reform act has created rules such as these. These rules are part of the reason states are suing the federal government. The states claim President Obama’s healthcare reform act is an infringement on states’ rights. This infringement on states’ rights has broader implications of the power of the federal government over the states. This was not the intent of the constitution.

This week President Obama’s healthcare reform act had experienced a judicial setback. A Virginia judge declared the healthcare reform act unconstitutional.

Hopefully the new congress will be as aggressive as the States have been in order to protect individual freedoms and the rights of states as intended by the constitution.

The opinions expressed in the blog “Repairing The Healthcare System” are, mine and mine alone.

Stanley Feld M.D.,FACP,MACE

It is almost impossible for the average voter to figure out what is really going on in Washington, DC. Politicians are shifty. The internet and blogging has made it a little easier to figure out. .

President Obama has received more criticism than any other president because he is shiftier than most other presidents have been.

It is getting harder to know what is going on because political strategy opposing taxpayers’ interests is formulated in secret.

It intensifies as the traditional media provides cover because of its bias. We miss traditional media sloppiness because we live in a sound bite society.

President Obama promised the AMA he would wipe out the accumulating decrease in physician reimbursement. The 23% is a result of yearly congressional postponements.

President Obama counted the savings resulting from this decrease in physician reimbursement in his cost estimated. He also promised the AMA a permanent fix to the Medicare payment formula. The AMA supported President Obama’s healthcare reform act because of this promise.

President Obama also promised that he would not sign a health-care bill that “adds one dime to our deficits, either now or in the future, period.”

The deficit neutral promise was never plausible. The Democrats’ strategy was to make President Obama’s healthcare reform plan “deficit neutral” by moving the $250 billion dollars in physician reimbursement off the healthcare reform act’s accounting books.

The House of Representatives’ passage of H.R. 3961 wiped out the accumulated Sustainable Growth Rate (SGR) debt off the books. The problem was the Senate had to pass the bill also. The Senate did not buy the trick.

Majority Leader Harry Reid explained the maneuver away at a press conference.

“All we’re doing is wiping the slate clean by adjusting the baseline to what is current policy.”

Senate Democrats strategy was to vote on a stand-alone bill that strips the SGR formula out of President Obama’s healthcare reform bill. The government then makes an unfunded addition to the increase deficit created.

President Obama has made serial promises that cannot be honored. Rather than include the pricey $247 billion plan known on Capitol Hill as the “doc fix” as part of ObamaCare, they’ll instead make this a separate contribution to the deficit, without compensating tax increases or spending cuts.”

Wiping the slate is right.”

The Senate voted again to postpone the automatic, accumulating 23% cut in Medicare physician payments, but only through New Year’s Day. A house vote rapidly complied.

Democrats left a permanent fix out of the final ObamaCare bill in order to keep the official price tag below $1 trillion.

Democrats planned to pass the $250 billion "doc fix" later in a separate bill, but somehow they never got around to it. Even liberals cannot always conjure up a quarter-trillion dollars on demand.

Many Democrats wanted the fix "paid for" with other spending cuts, real or invented.

President Obama deceived the AMA about the doc fix. President Obama is now deceiving voters about how he will pay for the fix.

Maybe President Obama should concentrate on fixing the healthcare system by doing a few simple things like increasing patient responsibility, decreasing the healthcare insurance industry’s abuse of the system by loading benefit expenses and institute malpractice reform to decrease defensive medicine. He should put patients in control of their healthcare dollars rather than making them more dependent on government and building a bigger bureaucracy.

Instead, he is concentrating on destroying the medical care work force.

I received this note today that says it all about government taking care of us.

Below is a note by a young physician to President Obama. His short two-paragraph letter to the White House accurately puts the blame on a "Culture Crisis" instead of a "Health Care Crisis.” It is worth a quick read: 

Dear Mr. President: 
During my shift in the Emergency Room last night, I had the pleasure of evaluating a patient whose smile revealed an expensive shiny gold tooth, whose body was adorned with a wide assortment of elaborate and costly tattoos, who wore a very expensive brand of tennis shoes and who chatted on a new cellular telephone equipped with a popular R&B ringtone. 
While glancing over her patient chart, I happened to notice that her payer status was listed as "Medicaid"! During my examination of her, the patient informed me that she smokes more than one costly pack of cigarettes every day and somehow still has money to buy pretzels and beer. 
And, you and our Congress expect me to pay for this woman’s health care? I contend that our nation’s "health care crisis" is not the result of a shortage of quality hospitals, doctors, or nurses.  Rather, it is the result of a "crisis of culture", a culture in which it is perfectly acceptable to spend money on luxuries and vices while refusing to take care of one’s self or, heaven forbid, purchase health insurance.  It is a culture based in the irresponsible credo that "I can do whatever I want to because someone else will always take care of me.” 
Once you fix this "culture crisis" that rewards irresponsibility and dependency, you will be amazed at how quickly our nation’s health care difficulties will disappear. 
Respectfully, 
xxxxx, MD 

There you have it.

The opinions expressed in the blog “Repairing The Healthcare System” are, mine and mine alone.

Stanley Feld M.D. FACP MACE

The healthcare insurance industry did great with President Obama/Kathleen Sebelius’ new regulation to apply administrative expenses to benefit expenses.

You could never tell reading the disinformation published by the traditional media. The reports were confusing and not informative.

In my last blog I reported that the healthcare insurance industry is trying to influence the regulations for expenses to be counted as benefit expenses for the healthcare industry . The benefit expenses are subtracted from the premium revenue before the 80% medical loss ratio is calculated.

The expenses the industry wanted included are;

1. The cost of verifying the credentials of doctors in its networks.
2. The cost of ferreting out fraud such as catching physicians over testing patients or doing unnecessary operations.
3. The cost of programs that keep people who have diabetes out of emergency rooms.
4. The sales commissions paid to insurance agents.
5. Taxes paid on investments.
6. Taxes paid on premium income.

All these expenses are administrative expenses in my view. These expenses could create a competitive advantage to an individual company. If these expenses are permitted as benefit expenses, resources available for direct medical care would decrease from eighty cents to sixty cents.

Last week Kathryn Sebelius published a fact sheet outlining the details of the new healthcare insurance regulations. The new regulations are clearly to the advantage of the healthcare insurance industry.

President Obama declared;

“Today, many insurance companies spend a substantial portion of consumers’ premium dollars on administrative costs and profits, including executive salaries, overhead, and marketing.  Thanks to the regulations , consumers will receive more value for their premium dollar because insurance companies will be required to spend 80 to 85 percent of premium dollars on medical care and health care quality improvement.   If they don’t, the insurance companies will be required to provide a rebate to their customers starting in 2012.”

We saw previously that WellPoint had a Medical Loss ratio of 83% including the six expenses as benefit expenses.

The National Association of Insurance Commissioners (NAIC) was charged to develop uniform definitions and methodologies for calculating insurance companies’ medical loss ratios. The commission was to consider input from all stakeholders. The healthcare insurance industry made 160 comments. Consumer protection groups made only 30 comments.

These regulation will make the healthcare insurance marketplace to be more transparent and make it easier for consumers to purchase plans that provide better value for their money.

This last statement is fiction according to the details in the fact sheet. The healthcare insurance industry won. There was nothing in the traditional media explaining the significance of the regulations.

I will outline the categories in the new regulations. I will describe the defects in detail in the future. President Obama has made another complicated mistake that will destroy the medical care system.

1. Establishing Greater Transparency and Accountability

This information will provide consumers with meaningful information on how their premium dollars are spent, clearly accounting for how much money goes toward actual medical care and activities to improve health care quality.

Right off the bat, the government has permitted the healthcare insurance industry to count activities it categorizes as improving healthcare quality as a benefit expense decreasing the funds available to direct medical care.

2. Ensuring Americans Receive Value for their Premium Dollar

This is an unsubstantiated statement.

3. Providing Rebates to Consumers

Insurance companies that are not meeting the medical loss ratio standard will be required to provide rebates to their consumers.

This will not happen because the healthcare insurance industry still has a high percentage of overhead as a benefit expense counte toward the medical loss ratio.

4. Insurer Reporting Requirements

Beginning in 2011, insurance companies that issue policies to individuals, small employers, and large employers will have to report the following information in each State it does business:

· Total earned premiums;

· Total reimbursement for clinical services;

· Total spending on activities to improve quality; and

· Total spending on all other non-claims costs excluding federal and State taxes and fees.

Unacceptable expenses are not defined.

5. Activities That Improve Health Care Quality

· Following NAIC recommendations, this regulation specifies a comprehensive set of “quality improving activities” that allows for future innovations and may be counted toward the 80 or 85 percent standard

There it is. The healthcare insurance industry can count bogus profit activity in the benefit expenses counted against premium dollars to be spent for healthcare. This is the place of obscene salaries.

6. Timing of Reporting and Rebates

· The first report, containing calendar year 2011 data, will be due in 2012

· Insurers will be required to make the first round of rebates to consumers by August 2012 based on their 2011 medical loss ratio. 

· Expatriate and mini-med plans that report separately will be required to report data to the Secretary on an accelerated basis.

The delay in reporting provides time for modifications of the regulations to the advantage of the healthcare industry

Treatment of Taxes in the Rebate Calculation

• The regulation will allow insurers to deduct federal and State taxes that apply to health insurance coverage from an insurer’s premium revenue when calculating its medical loss ratio. 
• In the case of non-profit plans, assessments they are required to pay in lieu of taxes may be deducted.

The healthcare insurance industry was able to maintain most of its non-value added expenses to its benefit expense column.

The healthcare insurance industry won. Consumers lost and were once more deceived by President Obama.

There were also multiple accommodations made to the healthcare insurance industry in the name of the consumer.

Accommodations to Ensure Continued Access to Coverage by Consumers

Accommodations to Avoid Market Destabilization

President Obama faked us out once again. The press coverage sounded as if the healthcare insurance industry would not be in a position to take advantage of consumers anymore.

I predict consumers will be very upset with the results.

The opinions expressed in the blog “Repairing The Healthcare System” are, mine and mine alone.