Unintended Consequences
Health insurance is becoming less competitive in Iowa:
Des Moines-based American Enterprise Group announced Thursday that it will exit the individual major medical insurance market, making it the 13th company to pull out of some portion of Iowa’s health insurance business since June 2010.
The reason: ObamaCare:
The new rule not only makes it more difficult for companies to turn a profit on individual health insurance, the company said. Federal regulators have given waivers in some states allowing companies to work their way up to the required 80 percent medical loss ratio. That means the required ratio varies from state to state, a level of complexity that requires more manpower to monitor and has hastened American Enterprise’s decision to exit.
I have a novel idea… Just open up the market and allow sales of health insurance across state lines. Then competition would drive down premiums. The federal government wouldn’t have to regulate the medical loss ratio.
The costs of compliance are never considered in these matters, but it is one of the reasons the Blues like regulations — the more complex the better. Blues plans typically have only one state to deal with, but their competitors have to understand and comply with widely varying regulations in each state, and they change every year. It has become a mountain of regulations.
Real reform is hopeless until this is fixed.
I agree with Devon. This is a simple, yet effective, solution.
Ditto Devon. You don’t have to worry about the differences in regulations if you open competition across state lines.