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Health reform

Insurers shift costs ahead of health law

Nancy Marshall-Genzer Apr 15, 2010
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Health reform

Insurers shift costs ahead of health law

Nancy Marshall-Genzer Apr 15, 2010
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TEXT OF STORY

Kai Ryssdal: One of the many, many requirements of the new health care bill is that insurance companies have to show they’re spending a certain amount of their revenue on actual care versus administrative costs and profits.

Today, the Senate Commerce Committee said insurers have changed their accounting practices to make it look like they’re spending more on patients than they actually are. Marketplace’s Nancy Marshall Genzer reports.


NANCY MARSHALL GENZER: Starting next year, insurers will be required to spend up to 85 cents of every premium dollar on actual patient care. Otherwise, customers get a rebate. The Senate report says the insurer WellPoint has already reclassified more than half-a-billion dollars of administrative expenses as medical costs.

ELIZABETH MCGLYNN: There’s every incentive for insurers to try to move as much as possible into looking like it’s medical spending.

Elizabeth McGlynn is a health policy analyst at the Rand Corporation. She says insurers might start by re-classifying things like brochures about wellness as patient care.

Christine Ferguson is a health care analyst at George Washington University.

CHRISTINE FERGUSON: And the question becomes is the point of this brochure more advertising than really education?

Right now, it’s hard to know what qualifies as a health care expense, and what doesn’t. The health care overhaul will establish a national standard. Ferguson says this is a big gray area. For example, can insurers classify a 24-hour nurse hotline as patient care?

FERGUSON: This is going to be kind of like the Supreme Court looking at pornography, you know it when you see it.

Robert Zirkelbach is a spokesman for America’s Health Insurance Plans, a trade group. He’s worried that federal regulators will take too narrow a view of what constitutes patient care.

ROBERT ZIRKELBACH: Don’t undermine programs that we know are working, programs that patients like and are relying on today.

Even if they can’t be categorized as patient care.

In Washington, I’m Nancy Marshall Genzer for Marketplace.

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