Wednesday, June 6, 2012

Astute Carrier Trick

In email this morning, Aetna reported on its experience with the new MLR (Medical Loss Ratio) rules. Aetna claims that, because of its pricing strategies, they're in pretty good shape:

"The reports we filed with [HHS Secretary Shecantbeserious] demonstrate our ability to price appropriately ... Aetna's rebates represent about 0.5 percent of the premiums we collected"

In fact, they claim that most of their insureds won't even see a rebate check.

Good for them (one supposes).

They acknowledge that the increasing cost of health care does, in fact, drive premiums, and that (as Bob has frequently pointed out) lifestyle choices (ie obesity) is a major contributor, as well. Of course, there's the usual sop to "waste and inefficiency" (why is it that no one can ever actually quantify this?).

But what really intrigued me was their answer to the question "is MLR even working?" They must be closet IB readers:

"The rules also unnecessarily increase administrative costs for us and our customers, and could even force insurers out of some markets, reducing competition and limiting choice."

Spot on.

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