Medical Loss Ratio. Rate review. Grandfathered plans. Insurance exchanges. Eyes glaze over, mouths gape open, and suddenly the hanging cuticle on your pinky is of great interest. The world of healthcare has all of these technical terms, designed to be obscure and mysterious about their actual meaning. We must not let that happen. Here’s why the outcome of terms like Medical Loss Ratio matter.
But first, in a nutshell, a recap of the healthcare reform passed in March 2010: The private insurance market has been expanded. Basically, the pool of monies that safety-net hospitals used to get compensation for caring for uninsured patients has been slashed. Instead, states set up insurance shops (called "exchanges") where you can purchase plans from big HMOs, but not one operated by the government–a.k.a. "the public option." This set up varies from state to state, regulated by insurance commissioners (some appointed by the governor, others elected by the public) who provide oversight for what private insurance plans are offered.
There’s more, but let’s just keep these changes in mind as we now consider Medical Loss Ratio (MLR). Healthcare reform changed how insurance companies can spend their money; this is where MLR comes in. Say that you’re a big insurance company. If you sell to individuals who are not affiliated with an employer or school, then you must spend 80 percent of the profit you make from those premiums on things that improve the quality of healthcare. If you make your money selling plans to businesses or schools, then 85 percent of your proceeds must go towards improving care.
As to be expected, the insurance companies are in revolt. They’ve launched a lobbying blitz on the state insurance commissioners, one month in advance of the state commissioners sending recommendations to the Department of Health and Human Services on insurance oversight. There’s a lot at stake for insurance companies. Some of the top earners in health insurance and managed care make upwards of $81 billion in revenue. Insurance companies are fighting to preserve the status quo, to define actions that hurt patients of color as efforts to improve care.
"What’s up for grab is what gets counted as a medical cost," explained Jill Reese, Health Justice and Training Program Director for the Northwest Federation of Community Organizations (NWFCO) and coordinator of the Health Rights Organizing Project. "Insurance companies are going to come up with crazy stuff, like medical underwriting, which is basically about denying people benefits. Or, certain wellness programs, such as obesity abatement programs, that blame people for being overweight. We want to ensure a clear definition of medical costs, so money actually goes towards improving the health of consumers."
The work of groups like the Health Rights Organizing Project has not only been to ensure that insurance companies can’t get away with squirreling away their profits, without fulfilling the legal mandate to improve care. It’s also to highlight what would improve the quality of healthcare for many communities of color. Numerous studies attest to the importance of culturally and linguistically competent communication between providers and patients in reducing racial disparities in quality of care.
Wendell Potter, a former insurance executive who’s famous for turning coat and blowing the whistle on his industry, says that insurance companies don’t hesitate to flood state insurance commissioners with their special interests. Thats a lesson for we the consumers, the communities of color, the ones excluded from quality healthcare even post-reform. Call up your state insurance commissioner–here’s a contact list-–and tell them that, in order for our communities to receive high quality care:
- MLR needs to be defined in such a way that authentically improves care, not just business activities reclassified as medical costs;
- Medical costs covered under MLR need to be reviewed regularly, to assess whether health outcomes have improved; and
- MLR must include language translation and interpretation, culturally competent care that is key to erasing racial disparities in healthcare access and delivery.
State commissioners will be gathering in Seattle at the end of July for their annual conference. Stay tuned for more news of a day of direct action in the Emerald City, a "Showdown in Seattle 2010" as Reese calls it, to hold insurance companies and big corporations accountable to the American people.