One of the provisions of Obamacare is that insurance companies must spend 80% of their premium revenue on medical care or refund the difference to consumers. Sounds logical and fair and good for the consumer, doesn't it?
But let's see what the fallout is. The Texas Department of Insurance contends that some companies will be driven out of the market by the new rule. And, in fact, in the last 18 months, four insurers filed formal plans to withdraw from Texas' individual market. One of those, National Health Insurance Company, covered 1,758 people last year. Those 1,758 people now face the daunting task of finding new insurance. At least 11 carriers have said they either will or might stop writing policies.
Another consequence is that the rule effectively prohibits the insurance company from building up reserves from a good year to cover a year that might have a higher number of claims than usual. In that case, guess what? Premiums will increase.
Obama wants you to believe that Obamacare is good for you -- "you're never going to go bankrupt because you get sick or somebody in your family gets sick."* But any way you slice it, it means higher premiums, fewer benefits, and a bureaucracy making your healthcare decisions. You may not go bankrupt, but you very well may die! Obama's spin reminds me of those old tobacco company ads. They show you the smiling, healthy, beautiful people smoking their products -- not the lung cancer patients who are so addicted that they're smoking cigarettes through their trachs.
"State plan slashes rebates." The Dallas Morning News; December 9, 2011; p. 1A.
*Obama quote: http://www.politico.com/playbook/
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