Kokomo Tribune; Kokomo, Indiana

Local News

September 27, 2013

Justifying rate increases and spending

[Editor’s note: With significant portions of the Affordable Care Act to be implemented starting on Jan. 1, 2014, the Kokomo Tribune is running a series of stories exploring how the personal responsibility mandate, the expansion of Medicaid and the new health exchanges will affect consumers.]

Q: It’s my understanding that at one time health insurance companies kept as profit of 5 cents of every premium dollar and now put as much as 50 cents in their pocket as profit.

The Affordable Care Act will limit the amount insurance companies can put into their pockets to between 15 and 20 cents of every premium dollar, depending on the market. Furthermore, the insurance companies must justify any premium increases to regulators, rather than just arbitrarily increasing premiums because they feel like it.

If so, when do these rules take effect and where does the consumer report/question premium increases?

A: The Affordable Care Act addresses insurance premiums and justification of rate increases in an effort to reduce the cost of health care. The two provisions are designed to hold health insurance companies accountable to consumers and ensure American families receive true value for their premium dollars, Kathy Young, CEO of St. Joseph Hospital, said.

Young said these provisions are known as the 80/20 rule, also called the Medical Loss Ratio rule, and Rate Review.

“Under the 80/20 rule, insurance companies are required to report how much they spend on health care and how much they spend on administrative costs, such as salaries and marketing,” she said. “If an insurance company spends less than 80 percent of individual and small group premiums or less than 85 percent of large group (usually 50 employees or more) premiums on medical care and efforts to improve quality care, they must rebate a portion of the premium that exceeded this limit back to consumers.”

Rebates can be paid in four different ways: A rebate check in the mail; lump sum reimbursement to the account used to buy insurance; reduction in future premiums; or, if insurance is through your employer, the employer must use the rebate to benefit employees.

Text Only | Photo Reprints
Local News
  • Bus crash 1 8-1-14 Maconaquah bus crashes on first day of school BUNKER HILL — A Maconaquah school bus transporting students collided with a Jeep Liberty at the intersection of 800 South and U.S. 31 Friday morning on the corporation's first day of fall classes for the 2014-15 academic calendar. Paramedics, police

    August 1, 2014 1 Photo

  • Miami County struggles through computer shutdown PERU (AP) — A northern Indiana prosecutor has harshly criticized other officials in his county for not adequately dealing with computer problems that have effectively brought some business to a halt. Prosecutor Bruce Embrey said Miami County governme

    August 1, 2014

  • Waterford Place looks to 11 senior living duplexes to campus More senior living options could be on the way in Kokomo.Waterford Place Health Campus, located in the 800 block of St. Joseph Drive, is looking to expand with 11 new senior duplexes after receiving approval from the Kokomo Plan Commission’s plat com

    August 1, 2014

  • Trial dates moved in Wagoner clinic drug case Trial dates for seven of the eight people charged in the Wagoner Clinic prescription drug case have been moved to Oct. 3.Several of the suspects – including Marilyn Wagoner, the wife of Donald Wagoner, the former head of the clinics – were set to sta

    August 1, 2014

  • NWS - Summer Fest 02 Russiaville Summer Fest starts Friday RUSSIAVILLE — You think you can knock a baseball out of the park? There's a contest for that. If you love to sing, there's an activity for that. If you're afraid to sing but know the words to your favorite song, there's an activity for that, too. The

    July 31, 2014 2 Photos

  • July 2014 has been the coldest on record Veteran Indiana residents are familiar with the old adage as it pertains to weather: "Hang out, it's sure to change." And, change it has. Just 24 months removed from the hottest July on record in 2012, the National Weather Service announced late Thur

    July 31, 2014

  • One injured in motorcycle crash A 50-year-old man suffered chest injuries when he crashed his motorcycle at Washington and Lafountain streets Wednesday afternoon. A Kokomo Police Department accident report stated Tommie Barger of Kokomo was driving a 1983 Honda 1100 south on Lafoun

    July 31, 2014

  • BMV offering driver tests in 11 languages INDIANAPOLIS (AP) — The Indiana Bureau of Motor Vehicles is now offering drivers tests in 11 languages other than English that are spoken across Indiana. BMV Commissioner Don Snemis said Wednesday the decision was made at the urging of businesses, un

    July 31, 2014

  • Tionna Brown 02 Kokomo celebrates Tionna Brown's gold medal victories Little boys with pretend gold medals around their necks fought Wednesday to get their pictures taken with a pint-sized superstar who had won three real gold medals for herself. Twelve-year-old Tionna Brown just returned from Texas after competing in

    July 31, 2014 2 Photos

  • KFD Rescue 2 Staffing changes leave Kokomo Fire Department with one rescue truck

    A shift in how the Kokomo Fire Department is staffed and responds to calls has some firefighters worried they will not have access to all the equipment they need. City officials, however, maintain there will be no change in the quality of service pro

    July 30, 2014 2 Photos

Latest news
Featured Ads
Only on our website
AP Video
Couple Channel Grief Into Soldiers' Retreat WWI Aviation Still Alive at Aerodrome in NY Raw: Rescuers at Taiwan Explosion Scene Raw: Woman Who Faced Death Over Faith in N.H. Clinton Before 9-11: Could Have Killed Bin Laden Netanyahu Vows to Destroy Hamas Tunnels Obama Slams Republicans Over Lawsuit House Leaders Trade Blame for Inaction Malaysian PM: Stop Fighting in Ukraine Cantor Warns of Instability, Terror in Farewell Ravens' Ray Rice: 'I Made a Huge Mistake' Florida Panther Rebound Upsets Ranchers Small Plane Crash in San Diego Parking Lot Busy Franco's Not Afraid of Overexposure Fighting Blocks Access to Ukraine Crash Site Dangerous Bacteria Kills One in Florida Workers Dig for Survivors After India Landslide Texas Scientists Study Ebola Virus Smartphone Powered Paper Plane Debuts at Airshow Southern Accent Reduction Class Cancelled in TN
Parade
Magazine

Click HERE to read all your Parade favorites including Hollywood Wire, Celebrity interviews and photo galleries, Food recipes and cooking tips, Games and lots more.
Obituaries