Monday, December 15, 2014

Blue Christmas

Most people probably aren't dreaming of a Blue Christmas but the folks on Capitol Hill included
a gift to our colored health insurance company. Our Congress critters voted on a 1600 page spending bill without ever reading it.

Fortunately there are others more diligent that give us some insight into what Congress did to us.

Tucked away near the end of the 1,600-page spending bill is a long-awaited technical fix to the health overhaul law — one that benefits Blue Cross and Blue Shield insurers and has been in the works since the bill was passed in 2010.
The backstory: Many of the nonprofit ‘Blue’ health plans receive tax breaks on their expenses and reserves as part of a 1980s arrangement in which they lost their broader tax-exempt status. Under the 2010 health law, Blue plans had to spend at least 85% of their revenue from insurance premiums on medical claims to continue to qualify for the breaks.

WSJ Blog


Blue can shift some of their overhead away from the 85% MLR restriction and categorize it as claim dollars. This free's up administrative overhead for more useful items like salaries and bonuses (among other things).

But here comes the other shoe.

This bill, including Blue pork, was voted on by people who were fired by their constituents and will be sent home packing in a few days. The will of the taxpayer was circumvented again.

Have yourself a Merry (Blue) Christmas.

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