3 ms·
Under ACA insurance companies must spend 80% of of premium dollars on claims and activities to improve health care quality. 85% in large markets. Sort of like t
by njarboe 9y ago
Under ACA insurance companies must spend 80% of of premium dollars on claims and activities to improve health care quality. 85% in large markets. Sort of like the cost-plus system in defense spending. The company % take remains the same so there is incentive to increase the amount spent. Just jack up the premiums.
- robbiemitchell 9y agoI disagree. The incentive is to spend as little as possible on the remaining %, because sick people already cost a ton as it is. Most insurance revenue comes from non-ACA employer plans, which don't have this requirement.
- vidarh 9y agoIt is a general problem with "cost plus" type arrangements though, that really always ought to have clauses to explicitly reward cost-cutting (by letting the provider keep a portion) and sound investments towards better care.