EXCERPTS:
"What would you think if bureaucrats confiscated your iPhone because they decided it didn't provide enough value? State regulators may help the federal government do just that to the health-care benefits of millions of Americans.
The most important element in implementing ObamaCare will be the requirement for health insurers to meet what is called a medical loss ratio. This requires health-insurance plans to split the dollars they receive from insurance premiums into two buckets.
Depending on the type of insurance coverage, 80% to 85% of premiums must be spent on either medical services or "activities that improve health care quality." This bucket includes everything from doctor visits, hospital stays and surgery to prescription drugs and medical equipment. It also includes programs to help patients cope with chronic diseases and reminders to take prescribed medications. The remaining 15% to 20% of premiums falls into a smaller bucket of "administrative" expenses like overhead, marketing, profits, compensation and agent commissions.
Regulators will soon decide which specific activities fall into which bucket. Forcing a wide range of services and benefits into the smaller administrative bucket puts them in direct competition with other critical aspects of a health insurer's business, as health plans will be compelled to cut back on those activities labeled "administrative" to meet new federal requirements. Plans will be forced to choose between priorities that benefit patients—such as preventing health-care fraud and reducing unnecessary services—and other priorities like creating new technological innovations or upgrading equipment....
