Comeuppance for Health Insurance Profiteers

Yesterday, a major -- I mean, HUGE -- section of the president's healthcare reform bill kicked into effect. Beginning right now, for-profit health insurance companies will have to spend 80-85 percent of insurance premiums on actual healthcare.

Rick Ungar:

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. [...]

If you thought that the Obama Administration chickened out on pushing the nation in the direction of universal health care for everyone, today is the day you begin to understand that the reality is quite the contrary.

The medical loss ratio reduction means that health insurers will on have 15 cents on the dollar to pay for administrative costs, advertising/marketing and, of course, profit margin. It's nowhere near the three percent margin for Medicare, but this is a very big deal.

One more thing. You probably won't read about this on FiredogLake or on Greenwald's blog.