Nonprofit, nonpartisan journalism. Supported by readers.


Franken offers health insurance bill


WASHINGTON, D.C. — Sen. Al Franken, D-Minn., who took office this summer, has introduced his third piece of legislation, titled the Fairness in Health Insurance Act of 2009.

The legislation would require that 90 percent of every premium dollar spent on health insurance go to actual health services. The remaining 10 percent could be used on administrative costs, advertising and profits.

“As we move forward in health insurance reform, it’s essential that insurance companies know that their top priority must be serving patients, not taking care of shareholders or CEOs,” Franken, who sits on the Senate Health Committee, said in a statement.

The bill is co-sponsored by Democrat Sens. John D. Rockefeller IV of West Virginia, Bernie Sanders of Vermont and Sheldon Whitehouse of Rhode Island.

Article continues after advertisement

A house companion bill will be introduced today by Rep. Keith Ellison, D-Minn.

Ellison previously introduced the Good Care Act of 2009which would also require insurance companies to put 90 percent of their premium dollars toward health care services as opposed to administrative costs.

Minnesota’s non-profit plans spend 91 percent of premiums on health services, according to Franken’s office.

Nationally, the rate varies by insurance market, according to a study conducted by Mark Hall, a professor of law and public health at Wake Forest University.

Hall found that in large employer-based plans, the range was around 85 to 95 percent. For small employer-based plans, the range decreased to 75 to 85 percent. And for insurance plans sold to individuals, the range was 60 to 75 percent.

“Minnesota is a national leader in health care,” Ellison said in a statement. “One way to help lower health care costs is to ensure that health plans spend the monies provided to them on health care services.”