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Medical Loss Ratio Paves Way for Single Payer? Let’s Hope So!

Mr. President, did you pull a switcheroo? Did you take single-payer off the table just to hand it to me under the table?

Rick Ungar thinks so. He says the medical loss ratio provision of the Affordable Care and Patient Protection Act, a provision finalized Friday, will kill private for-profit insurance:

...there is absolutely no way for-profit health insurers are going to be able to learn how to get by and still make a profit while being forced to spend at least 80 percent of their receipts providing their customers with the coverage for which they paid. If they could, we likely would never have seen the extraordinary efforts made by these companies to avoid paying benefits to their customers at the very moment they need it the most.

...we are already seeing the parent companies who own these insurance operations fleeing into other types of investments. They know what we should all know &ndash we are now on an inescapable path to a single-payer system for most Americans and thank goodness for it [Rick Ungar, "The Bomb Buried in Obamacare Explodes Today—Hallelujah!", 2011.12.02].

Hmm... requiring insurers to spend 80% of their money on actual health care. Does that mean Avera's new hotel manager gets a pay cut?

WaPo wonk Sarah Kliff finds such single-payer predictions premature. But let hope spring eternal. After all, health care is a right denied by our immoral system of rationing by profit margin.


  1. Steve Sibson 2011.12.05

    Cory, the government monopoly is the only entity than can achieve the 80% target by printing money that becomes debt for future generations. Such is the sin of coveting, making others pay for what we can't.

  2. Douglas Wiken 2011.12.05

    Oh, Steve. That hobby horse does not run. The government run systems have something like 4% overhead. The legislation apparently allows private systems to be 5 times less efficient.

    Of course, I'm not sure if any government health or veterans administrators expect $20 or $200 million a year salaries and millions for deceptive advertising.

  3. Tony Amert 2011.12.05


    That is not true, many non-profit insurance companies achieve a 93% rate. That leaves 13% for the insurance companies which seems more than reasonable.


    This would not impact Avera's new hire in the slightest. In fact, this won't impact the providers at all. Just the middlemen that skim profit.

  4. Steve Sibson 2011.12.05

    "That leaves 13% for the insurance companies which seems more than reasonable."

    I suspect the corporate lobbyists arranged that.

    And Doug, do you really think the government is capable of estimating their real performance? For example what is the rate of return on Social Security versus 401Ks.

  5. Steve Sanchez 2011.12.05

    Who else stands to gain from the mandatory payout? Physicians, hospitals, clinics?

    Consider the following. If I had previously put off surgery because my insurance provider either refused to pay or covered too little of the associated costs, my employer (paying the majority of family medical - and we're grateful) and I get nothing for our regular payments. The physician and facility where the procedure would have been performed also miss the opportunity to get paid for their services. Now if I choose to go ahead with the surgery because the insurance company has a mandatory payout, I benefit and so does the hospital, physician and anyone else having to do with pre/post and follow-up care.

    Here's something else I find interesting. Cost of a flu shot (for an adult) at MCH for uninsured person: $20. Cost of same flu shot for insured person: $36. It's these kinds of accounting tricks that are difficult to understand.

    It seems to me Sanford and others would be quite pleased about such a requirement.

  6. caheidelberger Post author | 2011.12.05

    Interesting note on shots: that seems to counter the trend in bigger medical procedures, for which the uninsured pay more.

    Steve Snachez hits a bigger point: we all benefit if more people go get what's wrong with them fixed. Single-payer would make that possible.

    As for Mr. Sibson: Doug is on point. Medicare runs on 3% overhead; typical HMO's, 15%–25%. I don't need to covet money from anyone else; I can simply advocate that we all spend the money we're already spending more efficiently, by cutting private bureaucracy and middlemen and enrolling everyone in Medicare.

  7. Bill Fleming 2011.12.05

    Perhaps Sibby fails to realize that it is the insurance companies coveting his money, and oftentimes not wanting to provide any services for the use of it when he needs them.

  8. Michael Black 2011.12.05

    3% overhead?!?!

    That is crap.

  9. Steve Sanchez 2011.12.05

    Cory, the insurance groups are going to pay those "small" charges over and over and over again - gladly. Healthcare facilities are going to make a bundle.

    When an uninsured person goes in for a major medical procedure and is grossly over-billed, it sometimes results in bankruptcy. If the uninsured person has the means to pay the exorbitant medical bill, the healthcare institutions make out like bandits. When the uninsured customer is unable to pay and defaults, there are larger amounts to be written off as losses.

  10. Thad Wasson 2011.12.05

    Millions of Americans forced to buy private health insurance or pay a fine to the federal government. From my vantage point, looks like a great deal for big insurance.

  11. Michael Black 2011.12.05

    If 97% of money went truly to servicing clients on Medicare it would be an incredible system. Each doctor employs a person to fill out paperwork so that he can be paid. The gov't employs people to approve payments.

  12. Nick Nemec 2011.12.05

    Michael, and you don't think that they have to employ workers to fill out the multiple forms the insurance companies require?

  13. Stan Gibilisco 2011.12.05

    "Mr. President, did you pull a switcheroo? Did you take single-payer off the table just to hand it to me under the table?"

    If the answer to these questions is "Yes, yes," then verily, verily, I say unto you, this administration believes that the only way to achieve single-payer is to force it upon the people by duplicitous means.

    That idea, in itself, ought to trouble us. That notion suggests that the President thinks most people don't want single payer, so they must have it rammed down their throats by destroying an entire industry under the guise of a seemingly benevolent mandate.

    Never mind that the existing medical-industrial racket is grossly immoral, perhaps more so than Obama could ever drive himself to be in his worst nightmares; never mind that past administrations have engaged in lies and deception to get their way.

    I have a problem with the idea that a few elites in Washington feel the need to deceive me about anything at all. I'm a big boy (5 ft 6 in, 125 lbs). I can handle the truth.

    By the way, I want single-payer! ;-)

  14. Michael Black 2011.12.05

    Nick, I'm just saying that Cory's figure of 3% is very wrong.

  15. caheidelberger Post author | 2011.12.06

    And you are asserting that, Michael, on the basis of what evidence?

    Stan, I agree that I would prefer straight-up advocacy for single-payer. I would prefer a President who lead us in a conversation about the viability of that option.

  16. Michael Black 2011.12.06

    Common sense...You are the one claiming 3% overhead. Do you know what overhead is in business?

  17. caheidelberger Post author | 2011.12.06

    Common sense my foot. Read the numbers. Show me counter numbers. I will not accept assertions in the face of numerical fact. Medicare spends more of each dollar on health care than any private insurer. Medicare is the best health insurance. Fact, fact, fact.

  18. Steve Sibson 2011.12.06

    "Perhaps Sibby fails to realize that it is the insurance companies coveting his money, and oftentimes not wanting to provide any services for the use of it when he needs them.'

    Bill, Obamacare was written for insurance companies.

  19. Michael Black 2011.12.06

    From WIKIPEDIA -

    In business, overhead or overhead expense refers to an ongoing expense of operating a business (also known as Operating Expenses - rent, gas/electricity, wages etc.). The term overhead is usually used to group expenses that are necessary to the continued functioning of the business but cannot be immediately associated with the products/services being offered. Overhead expenses are all costs on the income statement except for direct labor, direct materials & direct expenses.

  20. larry kurtz 2011.12.06

    Choose one, Sibby: anyone who believes that private enterprise would police itself is an idealist at best or at worst, a fool. Max Baucus torpedoed Tom Daschle and will pay at the polls come 2014.

    You Old Age Hypocritheocrites slay me.

  21. Bill Fleming 2011.12.06

    Larry, Sibby perhaps doesn't realize it, but he is actually a theocratic supremacist (at least insofar as his rhetoric goes). A Christian Supremacist to be more precise. Check this out against everything he posts here and elsewhere. These guys are anathema to the American liberal democracy:

  22. Steve Sibson 2011.12.06


    You have a habit of accusing others of what you are thinking yourself. It is the New Age Theocrats, of which you clearly are one, who think they are "as god" and are rightly described as "Supremacist". A true Christian is to be humble and give Praise to God and His Son Jesus Christ.

    Larry, I do not believe private enterprise should police himself. The government's role is to protect the free market from coercion and force. Sadly our federal and state governemnts are part of the coercion and force with regulations and picking winners and losers in the name of economic development. This combining of socialism and capitalism is called communitarianism. Facist Republicans are all too happy to see Marxist Democrats creating a bigger government for them.

  23. larry kurtz 2011.12.06

    Your opinion only, Steve. Had the rule of law not evolved to protect the citizens of the US, companies like Union Carbide would have Bhopaled all of us by now.

    Read through the obituaries and count the cancer deaths due to the abuses caused by industrial agriculture on farm states.

    Thank the goddesses for government.

  24. Bill Fleming 2011.12.06

    Right, Sibby, that's called psychological projection. You create an imaginary scapegoat to counter your own unacceptable behavior and then imagine anyone who doesn't believe what you believe must be one of "those." Totally, classically neurotic. A survival mechanism for a dead end philosophy.

    As per the last paragraph of the second link:

    "Christians realize that many of the above privileges are in decline. They interpret this as persecution because privilege is all they have ever known. The same is true when men complain about the decline of male privilege and whites complain about the decline of white privilege. The defense of privilege is a defense of dominance and discrimination, but for those who benefit it’s a defense of their traditional way of life. They need to become conscious of their privileges and realize that in a free society, such privileges are inappropriate."

  25. Steve Sibson 2011.12.06

    "that’s called psychological projection"

    And Bill, you are a master at it. Again, you get the Hypocrit Hat.

  26. Bill Fleming 2011.12.06

    Just holding up a mirror for you Sib. You can look into it or not, your call.

  27. Steve Sibson 2011.12.06

    Bill, we are all sinful.

  28. Roger Elgersma 2011.12.06

    The double spending of having the insurance companies and medicare both do paper work on one procedure or payments on one procedure or correct over pricing on that same procedure will be stopped if only one is paying. I happen to think that if only the insurance companies were in charge we would not get the real medical problems covered as exibited by the insurance companies pre existing condition clause that both saved them a lot of money and proved they had no intention of doing the job they were there for. The government is more unbiased since they do not have a profit motive to not cover our health care. Cutting the insurance industry totally out just reduces wasteful double spending. THis savings can cover the cost of helping the poor and everyone else pays the same with no increase in cost by covering everyone. That is both efficiency and quality at the same time.

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