If anything, mandatory MLRs encourage health insurers to drive overall spending upwards: Because profits and administrative costs will be limited to a small portion of each premium dollar, they end up tied to spending on medical services. So if an insurance company wants to expand the pool of potential profit dollars, one easy way to do that is by increasing spending on medical services and thus increasing premiums. And with some administrative cost-saving activities limited as well, that will be even easier.
HHS Secretary Kathleen Sebelius says the rules "guarantee that consumers get the most out of their premium dollars." I’m not sure they guarantee much of anything, but a better bet is that they’ll result in insurers getting more premium dollars out of consumers.
Guy Benson is Townhall.com's Political Editor. Follow him on Twitter @guypbenson. He is co-authors with Mary Katharine Ham for their new book End of Discussion: How the Left's Outrage Industry Shuts Down Debate, Manipulates Voters, and Makes America Less Free (and Fun).
Author Photo credit: Jensen Sutta Photography