Congresswoman: Obama admin rule change lets insurance companies keep more profits, pay less for care
Republican Tennessee Rep. Diane Black says that the Obama administration’s most recent Obamacare rule change will result in insurance companies keeping more profits while paying less for customers’ health care needs.
“I am writing to express my concern with the proposed rule change released on Friday, March 14th that would allow insurance companies to keep an additional two percent of premiums for purposes other than medical care…your department is now proposing to increase the amount of money that insurance companies will be allowed to retain for profit,” Black wrote in a letter Tuesday to Health and Human Services (HHS) Secretary Kathleen Sebelius, which was obtained by The Daily Caller.
HHS’ Centers for Medicare and Medicaid Services quietly introduced the new rule Friday, which relieves insurance companies of some of the damage about to be levied on them by Obamacare-related administrative costs.
“In the proposed rules, you have indicated that this adjustment in the ‘medical loss ratio’, or 80/20 rule, is due to the possibility of increased administrative costs in 2015. However, adjusting the percentage that insurance providers are required to spend on medical care by two percent would have the combined impact of reducing the amount that insurance providers will be required to pay for people’s medical care while increasing the amount that insurance companies are allowed to retain for profit and for executive pay,” Black wrote.