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Texas Association of Health Underwriters Says June 1 Rebate Predictions Demonstrate Health Care Reform’s Flaws
TAHU advises restructuring medical loss ratios to focus on cost of care, not administrative costs, to lower premiums
Dallas, TX—April 30, 2012—With the June 1 deadline for insurance rebate filings quickly approaching, a Kaiser Family Foundation report of projected rebates has reignited debate regarding Health Care Reform and current medical loss ratios. According to the research, 3 million policy holders will receive an anticipated $1.3 billion, with estimates based on 2010 data applied to current MLR standards. InTexas alone, the rebate estimate is $186 million. The rebate filings stem from MLR guidelines that require 80 to 85 percent of health insurance premiums be directed at medical care and health care quality improvement rather than administrative costs. The Texas Association of Health Underwriters states that the projected rebates are low considering the rate at which premiums are increasing and proves the flaws with current MLR standards. The Texas Association of Health Underwriters is a professional organization of more than 1,900 independent health insurance agents and brokers whose mission is to “inform and protect the consumer.”
“Although this data is not final as the filings are due in June, if it is close then this data affirms everything we have been saying since the bill was debated and passed more than two years ago,” said TAHU President Joanna Antongiovanni. “It confirms our previous analysis that administrative costs are not the real issue in the rising premium levels. We are still seeing health care premiums that continue to increase well above regular inflation and the projected rebate represents a small percentage of premiums. Without addressing the true cause of increasing rates, the actual cost of care, we will be ineffective in solving the health care conundrum in our country.”
The Kaiser Family Foundation’s research estimates employers will receive an average of $127. Antongiovanni says it is an insignificant figure compared to annual premiums of $5,400 a year for an individual and $15,100 for a family that they must pay.
“Several employers I work with are disappointed because the rebates will not be as high for group policies as they will be for individual policy holders,” Antongiovanni said. “However, only 31 percent of individual policy holders are expected to receive rebates. By focusing on lowering the 20 percent that composes health care premiums rather than the larger 80 percent, there will be serious repercussions as health insurance companies will remain only in competitive markets and employers will have less access to health insurance agents who work with them to get the best rates possible.”
For more information about TAHU and its stance on MLR and Health Care Reform, visit www.TAHU.org.
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About the Texas Association of Health Underwriters
A state chapter of the National Association of Health Underwriters, TAHU is a professional organization of agents and insurance company representatives aiming “…to inform and protect the consumer by enhancing the professional growth of its members.” Since its founding in 1930, there are now over 200 state and local chapters of the NAHU servicing the insurance needs of millions of Americans. More information can be accessed at www.TAHU.org.
