Insurance Companies Adopt New Accounting Trick to Get Around Healthcare Law Requirements

It appears that big insurance companies are already trying to find ways around a new healthcare bill, proving once again that they aren’t overly concerned with putting people before profits. According to recent reports, some of the largest U.S. insurers are “shifting” costs in their accounting books to make it appear as if they are trying to comply with the new medical-loss ratio industry requirements required by healthcare reform. Specifically, under the MLR requirement, insurers must adjust their spending habits so that at least 85 cents of every premium dollar paid goes toward actual medical care as opposed to “administrative costs”.

However, instead of actually changing their spending practices and putting consumers’ premium dollars towards providing actual medical care, they are simply changing accounting records that indicate money spent on administrative costs to instead show money spent on medical care costs. The result? Nothing actually changes—consumers are still left with less medical care coverage for their money and big insurers end up with the same large profit but can still “appear” as if they are following the new healthcare requirements.

You might be wondering what MLR stands for—simply, it’s an acronym that really tells insurers how much money they’re “losing” in providing medical care. Funny, considering insurance companies are supposed to be providing insurance. I guess they’re too busy worrying about their profits instead. Although the official MLR rule doesn’t take effect until January 1, insurers’ shady practices are evidence that they are still far below what the new law will require.