Franken warns against weakening law on health-care spending

WASHINGTON — Sen. Al Franken warned today against weakening newly passed health-care reform regulations that aim to steer more health insurance dollars to actual medical costs.

A Franken amendment to the new health-care law requires insurers to spend at least 85 percent of premiums in large group plans and 80 percent of premiums in small group or individual plans on actual health care costs (with the rest able to go to things like administrative costs, advertising and profits).

Franken’s worry is that federal regulators, under intense lobbying from the insurance industry, may loosely define what an actual health-care cost is. Insurance companies, he continued, are looking for “loopholes” and ways to “game the system.”

“The reason they don’t want stricter regulations is simply because so many companies have been making outrageous profits by gouging American families,” Franken charged.

Franken said that regulating what insurance companies can declare as medical services will make them “more responsible to their policy holders and their stock holders.”

Inga Haugen owns and runs a 230 acre dairy farm in Canton, Minn., with her mother and said she spends nearly one-fifth of her take home pay on health insurance.

Haugen said she would save money by insurance companies lowering their costs by weeding out high administrative fees – or through the rebate she’d get if her insurer didn’t hit the mandated medical-care spending threshold.

“I want insurance companies to fix it, don’t shift it,” Haugen said. “I need clear definitions of medical costs because they are imperative for a fair comparison. I don’t sell manure as fresh milk.”

Lauren Knobbe is an intern in MinnPost’s D.C. Bureau.

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Comments (2)

  1. Submitted by Sue Halligan on 07/23/2010 - 12:33 pm.

    Hurrah for Al Franken! We can all help: call Minnesota’s Insurance Commissioner, Glenn Wilson, at (651) 296-4026 and let him know we support tough regulations that hold insurance companies accountable to the public interest, rather than to insurance lobbyists.

  2. Submitted by Bernice Vetsch on 07/24/2010 - 01:37 pm.

    Medicare-for-All would have been THE solution that assured access to quality health care to every American while saving us $400 billion per year. But, of course, that was off the table due both to ideology (it’s “socialism,” you see) and to pressure from the powerful insurance and drug lobbies.

    What’s missing from this sort-of copy of the way many European countries spend about half what we do while assuring health care to all is their government regulation of: health care costs, insurance premiums to match but not exceed costs(all insurers are non-profits) and a set of benefits common to all citizens.

    Franken’s bill seeks to address the fact that the federal legislation leaves the insurance companies able to raise their premiums at will and to post the increases to their bottom line profits (up 428% for the top 10 companies from 2001 – 2007).

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