The Obama administration on Monday outlined rules to restrict health insurers’ spending beginning next year, a key provision of the health care overhaul that aims to improve value for consumers.
The rules will have vast implications for how insurance companies spend money as well as for other aspects of the health care industry. Insurers’ worries that the Department of Health and Human Services would rule against them on a number of issues were unfounded, and many of the nation’s largest insurance companies’ stocks rose on the news Monday.
2) They can pay out more for the claims. An X-ray that used to cost you $275 will now be $300. That's awesome for everyone but the insured.
3) They can raise your premiums. Think about it. Let's assume that you've cut your overhead to 17% of the 100 million in premiums you've collected and you're down to the bone. Simply raise your premiums to $110 million and your ratios are in like flint.
Needless to say, price hikes are the path of least resistance since most insurers are not out to run nice and fat overhead operations.
So doctors and hospitals can look forward to a nice raise soon.