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Franken health-care amendment limits administrative spending

WASHINGTON, D.C. — Sen. Al Franken today introduced an amendment to the Senate’s health-care reform bill that would require 90 percent of the money spent by consumers on health insurance premiums go to health-care costs.

Under the Senate’s legislation currently, insurance plans competing in the proposed insurance exchange would have to spend 85 percent of premiums on actual health services, as opposed to administrative costs and advertising. Individual plans not in the exchange would have to spend 75 percent. Franken’s amendment would apply to all plans.

“As we move forward with the Senate health-reform bill, it’s essential that insurance companies’ top priority be serving patients, not taking care of shareholders or CEOs,” Franken said in a statement. “The Ensuring Value for Premiums Amendment is a key part of ensuring that health insurance reform puts patients before profits. The standard set by the current Senate bill is a tremendous improvement, but Minnesota’s success shows that we can do even better.”

Non-profit health plans in Minnesota spend an average of 91 percent of premium costs directly on health care. Franken’s office said the national average is around 70 percent, with large plans spending considerably more percentage-wise on average, and individual plans less.

The amendment closely mirrors a bill Franken introduced in September, which would have done essentially the same thing. It was a companion measure to a House bill Rep. Keith Ellison introduced in June.

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