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MN GOP House Passes ReInsurance Bill - Gift To Insurers

Category: GOP House Republicans
Posted: 03/14/17 14:56

by Dave Mindeman

It must be in the Republican legislative DNA to always find a way to give business and corporations extra benefits.

Case in point is the MN House GOP reinsurance bill.

First of all, what is it?

The so-called reinsurance plan would have the state share in the costliest claims....It works like this: Insurance companies that incur a subscriber's claims exceeding $50,000 and up to $250,000 would have a portion of those costs covered by a new state fund. A board would determine what percentage each payer shoulders. The theory is that cost-sharing will improve premium rates for everyone because the risk tied to those sickest patients wouldn't be borne as much by the healthier subscribers.

So, the state steps in and helps the insurer cover the costs of a contracted client. The taxpayers kick in and help out the insurer...because in theory, they will pass on this benefit in their overall premiums.

Governor Dayton foresees a problem...

Dayton wants assurances about the plan's effect on rates and their willingness to keep offering individual market insurance. It can't be just a blank check to the insurance industry, he said.

There it is. Where is there any guarantee that insurance companies won't just take the state benefit and simply add it to their bottom line calculation? What premium benefit will happen? Frankly, I am guessing none. They can say anything. They can pretend anything. All we will know is that the reinsurance money will help cover an insurance company obligation.

The House voted down the Minnesota Care buy-in amendment. This would have allowed people with bigger claims to take a public option. By far, this would have been the preferable way to do it.

If you think about it, the taxpayers pay either way. At least with the Minnesota Care buy in, we know where it is going and what it is doing.

Republicans are only giving insurers another gift.
comments (6) permalink
03/14/17 20:43
Public option was a way for the private market's failure to convert over to a high risk pool that would eventually dominate the system. A back door version of single-payer.

We currently have a monopoly market with insurance companies holding the book of business but constrained by legislated specifications. Monopoly business is always bad business. The natural market mechanisms don't function and those in line to profit figure out how to game the regulators into profitable concessions.

Converting this to Monopsony economics is no less difficult to constrain. The two extremes give each party to the healthcare 'purchase' unlimited control. Either pure form is destructive.

Allowing the markets to function settles the score by letting interested parties to choose their own optimum when competing goals find equilibrium--price, quality, service, pick any two. It becomes a proper role of family, charity, community, to provide the safety net.
03/14/17 19:37
Your assumptions about Dem intentions are just as wrong as Trump's delusions.
03/14/17 18:14
I resent your "people like you" comment. I have never clamored for a repeal. I went to the GOP convention in Rochester as a delegate and passionately argued that we won the fight. We don't have single-payer. We won that fight. But we did totally lose in 2008 by not setting this up to fix our broken healthcare marketplace.

If you are going to cover with no pre-existing conditions, and still retain the insurance company involvement, then this is what you get. But it is seriously broken and if it takes a repeal to get this done, then repeal it. But doing nothing is beyond stupid.

Trump is right about this is all in the 2008 plan of lasting until 2017 and then break. The "break" part was supposed to herald in Single-Payer. In 2008, every wonkie politico believed the brokenness would be part of the 2016 election debate. The Dems believed their largess would sweep the country and a pure socialist agenda would rule the day. But then the voters showed up and screwed up their "plans" for a planned economy and rationed healthcare.

But when the government option fell into the abyss, the wonks threw in the towel and here we are today, with a bigger mess than in 2008.

Blame the problem. Not the messenger of bad news.
03/14/17 17:54
Please pay attention. The ACA has a provision that if a health care company exceeds 80% of administrative cost, then they must refund an equivalent amount. The ACA did fix some things, but now, without understanding it, people like you clamor for its repeal. The Republican replacement is so much worse.
03/14/17 16:56
50% of the cost of healthcare has been reported to be paperwork. So who is going to review the claims? First the hospital submits a claim, then the insurance company reviews it, sends back for update, review and pay (current system sucking up 50% of the oxygen in the system). So now the House wants those claims to go to a brand new MN agency to review the claims passed through to the state? Yet another layer of paperwork. at what administrative cost to the state?

Why don't they fix what is broken? Make the patient the customer, not the insurance company, and from the sounds of things...the state of MN.

It's tough to fix stupid. But somebody's got to do it!
03/14/17 16:51
Another MN Stupid-tax? The ONLY cost containment under the current payment systems in place for the past 50 years is the insurance company review to determine appropriateness of the fee and a slap on the wrist to the care provider if their fees are excessive. That has somewhat worked for but the insurance company and the patient. Many times you see the fee subject to the deductible reduced by the insurance company review.

From the sounds of your description, there would be exactly NO incentive to do anything other than pass those costs, no matter how ridiculous, through to the state.

If this passes, Dayton needs to unceremoniously veto it.



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