Insurance Rebates total $1.3 Billion this summer

Today the Washington Post reported on a significant milestone in the Accountable Care Act:

Insurance rebates totalling $1.3 billion could be on the way this summer, study says

Almost word for word a direct quote from a Kaiser Family Foundation release - Insurer Rebates under the Medical Loss Ratio: 2012 Estimates, what little "value add" the Post brought to the news was a quote from Robert Laszewski, "a health-care industry consultant and former insurance executive":

" .. rather than sacrificing profits, many insurers have cut administrative costs in ways that could ultimately be passed on to customers.

Perhaps most importantly, he said, the rule does not address the main driver of insurance premiums: Health-care costs continue to grow faster than wages and the rest of the economy.

“This rule doesn’t make health insurance any more affordable,” he said.

Mr. Laszewski's comments serve to obfuscate the intent of the rule by pointing at other issues that are not material to the matter at hand here. I'm disappointed in the Post for giving him a platform to distract people from the real issues that this rule attempts to address.  
 
Yes, healthcare trend is the major issue in the industry. Healthcare reform has many approaches to address trend, ranging from ACOs to Health Records, all designed to both improve the quality of care the average american receives, as well as reduce the cost of that care. 
 
However this rule doesn't attempt to address that issue - it's designed to ensure that when you buy a product, you're getting value for it. 

It's somewhat telling that the industry standard term for the percent of your premium dollar spent on delivering benefits to you is called the Medical LOSS ratio. In case you missed it this is the percent of the money you pay an insurance company that you actually will get back in the form of healthcare. Everything else goes to marketing, sales, administration and, yes PROFITS. 
 
The industry is complaining that they need to spend 80% of the monies YOU pay them to ensure you have access to quality care when you need it on YOU. In California the regulators define benefits designs as "illusory" if MLRs fall below a certain level, and will require plans to change or remove from market the plan. 
 
One state that has struggled with this is Texas, where many plans are down around 50 - 60% MLR. Interestingly their legislature recently shifted the market transition dates for this minimum MLR process. Their rationale? Some insurance companies would struggle in compliance by the target dates, and would have to withdraw from the state, leading to fewer options for consumers. 

Really. 

I have to laugh at this self-serving rationale. If this were the food industry this would be the equivalence of saying too many companies struggle with keeping e coli out of their product, so hey, consumer, in the interests of giving you diversity of choice, we're going to keep products on the market that make you sick or kill you. The irony is staggering. So the state of Texas is going to continue to allow insurance companies to essentially steal money from consumers because they can't figure out how not to steal from them? Give me some of that business. It's no surprise that if you look at the state breakdown of anticipated payments, Texas accounts for more than 25% of all anticipated paybacks. 
 
So let's not confuse different regulations striving for different outcomes. Focusing on the efficiency of the Insurance process is an important step in driving both accountability to insurers, as well as the efficiency of your buying power. It's good consumer protection. Attempting to distract the public from this outcome is both disingenuous as well as self serving. The Post should understand this, Mr.Laszewski certainly does