Stacey Pogue, a senior policy analyst at the Center for Public Policy Priorities, said that states such as California and New York possibly “have a better system of regulation and oversight on insurance policies,” and that could account for their lower MLR refund price tag versus a state like Texas. The HHS has announced that Texas will refund $167 million in rebates to the insured community, versus $73.9 million in California and $86.5 million in New York. But perhaps it is not a better system of regulation and oversight on insurance policies in these states. Perhaps it is the $17.3 billion dollars that hospitals in Texas have to pay annually to care for the uninsured in their state. And this bill is passed on and paid for by all Texans. Perhaps, as Kathleen Stoll, the author of Family USA’s 2009 report on the phenomenon states, “the extra amount Texans pay in employer-based coverage is close to double the national average because so many Texans are uninsured.”

The MLR rebate requires that carriers spend at least 80% – 85% of the premium dollars they bring in to be spent on medical costs. However, the cost of care for insured patient’s is directly related to the cost of care for uninsured patient’s. If hospitals are taking care of patients that can’t afford to pay their bills, and the government is reimbursing the hospitals at rates that are far under the true cost of care, where else can hospitals get money to stay open and care for patients? The only logical answer is to charge insurance carriers more for services than there actual cost. And these higher costs for services relate back directly to the premiums charged to the insured. Therefore, if you live in a state with a large population of uninsured or underinsured, Medicaid or Medicare members, the premiums charged by carriers to employer’s is going to be far higher than the states that have low populations of these uninsured and underinsured members.

If healthcare reform’s mission is truly to bring health insurance to all citizens at an affordable rate, we need to take a look at the reasons that healthcare has become so unaffordable to those buying it and start chipping away at those issues… and not just point our fingers at the health insurance carriers who provide insurance and pay for services at a more than reasonable rate!


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