Yamileth Medina

Health Insurance Companies Switch Tactics



Posted: Friday, April 09, 2010

by Yamileth Medina
VitalOne Health

For the past year, health insurers tried their hardest to defeat healthcare reform. It would obviously have a negative impact on their profits, for several reasons. The law phases out the common practice of denying coverage to people with pre-existing conditions, a method of controlling costs. Health insurance companies will also be forbidden from having lifetime or annual limits on the amount a policy pays out.

Most directly, the legislation regulates the medical loss ratio, which is the percentage of premiums spent on medical care, as opposed to administrative costs, profits, and other expenses. Moreover, the bill was passed largely by demonizing insurance CEOs. Even the "Tea Party" groups protesting against the bill have focused more on its negative impact on small business owners, doctors, and taxpayers.

America's Health Insurance Plans, the industry's top lobbying group, was at the forefront of opposition. At the 11th hour, they launched a national advertising campaign in an attempt to kill the bill. Their efforts gained support and initially showed signs of success, culminating in a Republican opposed to the legislation being elected to the late Ted Kennedy's seat in Massachusetts. However, the Democrats managed to reconcile the bill and pass it.

While political groups can push for the repeal of affordable health insurance reform, businesses do not have as much flexibility. Instead, insurers must adjust to the new legal and regulatory environment. According to Robert Zirkelbach, a representative for AHIP, they are now focused on implementation without much disruption.

Indeed, insurers were involved in some initial discussions with the Obama administration and prominent congressional Democrats when they were crafting the bill. They also stand to benefit from the new individual mandates, which will require people to buy a health insurance plan. Over the next decade, about 32 million new customers are set to enter the market. Health and Human Services Secretary Kathleen Sebelius has highlighted this point. Cooperation may be a more prudent strategy, especially since much of the protest over the bill surrounds that aspect most favorable to them.

Yamileth Medina is an up and coming expert on Affordable Health Insurance and Healthcare Reform. She aims to help people realize that they can find a quality health insurance plan right now. Yamileth lives in Miami, FL.
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