Thursday, May 19, 2011


One of the key elements to the Democrats' PPACA health care bill was setting a limit on "medical-loss ratios." One of the problems with the US private insurance system is the fraction of premiums paid that is used to pay for health care, rather than marketing, dividends and executive compensation, not to mention private jets serving lunch on gold-rimmed plates. Stock market participants tracked this number closely, rewarding companies with low values, which were frequently in the high 50s. This is in contrast to, say, Medicare, which is in the high 90s.

Under the PPACA, insurers are required to spend at least 80% of the premiums received on actual medical care. Of course, anyone looking at this would expect the insurance/HMO companies to redefine administrative and other expenses as "medical," but still it was something.

However, there was a provision for a waiver of this requirement in states where for one reason or another it couldn't be attained. 12 states plus Guam have applied for such a waiver. Maine, New Hampshire and Nevada have received their waivers so far.

65% for the Pine Tree State. 72% for the Live Free or Die crowd and 75% for the Silver State.