Tuesday, December 11, 2012

MLR = More Lousy Results

Medical Loss Ratios (defining how much of each premium dollar must go to claims) continues to wreak havoc with the health insurance business, with the individual market taking the brunt:

"Large and small group plans seem to have done better in 2011 than in 2010, but individual insurance operations seem to have done worse"

The end result is that underwriting has tightened, carriers have left the market (and thus reduced competition), and carriers are laying off employees (granted, some of those were likely overdue, but still).

As the individual market dries up, and as the ObamaTax Exchanges come on-line, look for things to get worse.

Oh come on now, Henry, how could they get worse? After all, the Exchanges will be professionally run, carriers will have to take all comers, and pre-ex is a thing of the past.

Well, the "professionally run" claim is dubious, at best, and the guaranteed issue provision - coupled with an end to limiting pre-existing conditions - means that premiums are set to skyrocket. Of course, the subsidies will ameliorate that problem.

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