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Bomb Buried in Obamacare Has Dropped

A provision of the new health care law, which requires health insurance companies to spend 80% of the consumers' premium dollars they collect on actual medical care, has entered into force.

What’s the Latest Development?

From now on, health insurance companies must spend 80 percent85 percent for large group insurersof the of the consumers’ premium dollars they collect on actual medical care, rather than on overhead, marketing expenses and profit. “Indeed, it is this aspect of the law that represents the true ‘death panel’ found in Obamacare—but not one that is going to lead to the death of American consumers. Rather, the medical loss ration will, ultimately, lead to the death of large parts of the private, for-profit health insurance industry.”

What’s the Big Idea?

“This is the true ‘bomb’ contained in Obamacare and the one item that will have more impact on the future of how medical care is paid for in this country than anything we’ve seen in quite some time,” says Rick Ungar. While this may represent a step in the direction of a single-payer system, nobody need fear the death of the private health care industry. For-profit insurance providers will be around as long as there are people willing to pay for them. And as care becomes more available, the desire for private care may increase.

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