Insurers’ ‘Gaming’ of Obamacare Provision Seen Boosting Premiums

Get ride of the 80/20 rule - it hurts everybody and helps nobody

Larger companies typically sponsor self-funded health plans in which the employer pays most medical bills directly and hires third-party administrators to handle claims and help design plans. Those plans aren’t subject to the ACA’s medical loss ratio rules, but they can be affected.

“When you look at the administrative services-only parts of those same entities, they’re very, very significant businesses, and they leverage the same network contracts,” Mark Galvin, president and CEO of TALON, said of the insurance company businesses that administer plans for self-insured employers. TALON is a Portsmouth, N.H., company that compiles health-care data.

“At the end of the day, they’re happy for medical losses to go up, as long as it’s happening kind of across the board for all of them,” said Galvin, who argues that the medical loss ratio drives up health-care prices and should be repealed.

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