The Death Panels just gave me $85.

I just got a check for $85 in the mail from my insurance company along with a letter saying, "The Patient Protection and Affordable Care Act says we're only allowed to spend 20% of our income on crap that isn't actually health care, and we spent more than that last year, so here's your refund."

If a lot of people are getting these checks, I can hardly imagine a more effective re-election campaign!

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20 Responses:

  1. Roger says:

    I received $1.90 as a mailed paper check which probably cost about that much to print. Incidentally last year they raised my premium by 20% so they slightly overshot on that. Of course their first plan was to raise it by 32% before a California review said no.

    • That Tricky Dick Fun Bill seems more suited for a W. Bush-era tax refund advance check than refunds from gouging insurance companies, but I like how you think.

  2. For those of us with employer-payed health plans, we aren't getting that; our employer is.

    I, however, aren't getting anything. I checked, and my insurance company (as selected and paid for by my employer) spent less than 10% of their income on crap that wasn't actually health care, so they get to keep the rest.

  3. James says:

    Only people in very small companies or on individual plans, who tend to skew independent/undecided, so it's perhaps even more cost-effective. (Note: that link gives a misleadingly low impression of single payer savings because most of it -- and the far more valuable increase in lifespan -- is due to universal preventative care, not reduction of insurance company overhead. The total comes to about $1.4 trillion per year in savings relative to Obamacare.)

  4. Brian P. says:

    You know who else got refunds? Nazis!

    (Sorry, I just couldn't resist.)

  5. Ryan Finnie says:

    This "Patient Protection and Affordable Care Act" sounds pretty awesome. Was this passed before or after that horrible Obamacare I keep hearing about?

  6. Paradox Six says:

    If you read the fine print, you can opt in for a pony instead of cash. I await my free pony from 2 term president Obama.

  7. NelC says:

    Coming as I do from Socialist Eurabotopia, I'm having great trouble parsing this, or being sure that I'm parsing it right.

    So there's a regulation that the insurance companies have to spend 80% of their expenses on health care? And if they spend less than that proportion they have to refund the difference to their policy holders? So there's no incentive on their part to reduce health care costs?

    • "So there's no incentive on their part to reduce health care costs?"

      Hewh. Of course. While Obamacare is an improvement, the health insurance companies know how to play US politicians into "heads I win, tails you lose" situations.

      In this case, it looks like their lobbyists were pretty compentent in setting up a win-win-WIN scheme, and their financial administrators less so in making good use of it.

      I suspect it won't happen again :-/

    • Ben says:

      It reminds me a lot of AT&T's profit limit from before their breakup. They were only permitted to make 10% profit, and it lead them to burn cash for that exact reason.

      If only we had a functional political system, we might be able to improve the regulation in the future.

      • Lun Esex says:

        It's a little different, here. The costs of AT&T's bureaucratic overhead was in the 90% that wasn't profit. The costs of the insurance industry's bureaucratic overhead are now in the 20% that isn't health care, alongside their profit. So for the insurance industry to increase their profit now they can:

        A) Maintain their overhead and spend more on health care, taking a 20% cut of that
        B) Spend the same amount on health care and reduce their overhead
        C) Do a combination of both

        Note that besides not including a public option, one of the other major objections from liberals about Obamacare was how it didn't have enough cost control provisions. (See A, above.)

        • Nick Lamb says:

          Cost control and rationing look more and more similar the further you get from individual patient care. For a specific patient you may be able to say categorically that treatment X and treatment Y will have the same outcome and so you choose cheap option X. That's clearly just cost control. At the federal level a decision on funding plan X rather than play Y may have the same overall population wide outcome (e.g. 50M quality adjusted life years improvement) while X is cheaper than Y, but it's rationing because somewhere there's someone who as an individual would have benefited more from plan Y.

          Rationing is a really hard sell. Intellectually people can grasp the idea that resources are limited. But when the concept translates into the real world the reaction is emotional. So even if politicians at one moment realise the benefit of explicitly setting up a federal organisation to manage the rationing, they'll never have the backbone to stand by its decisions in the face of emotional voters who want an exception made. Leaving the insurance companies in the loop means that politicians keep their hands clean, which for them is the most important thing.

    • 205guy says:

      Well, the assumption is they've collected X amount in premiums already for the year (or know they will), so they'd better aim for 0.2X or less in non-healthcare spending (processing, administration, dividends, CEO bonuses, etc.). And let's say they did spend less than 0.8X on health care (paid claims), so they need to return some money to their policy holders. Next year, instead of returning money, they could offer better benefits (without raising premiums) or reimburse their policy holders more easily or just lower the premiums, because that would allow them to compete for marketshare.

  8. Mine was for three dollars and EIGHTY THREE CENTS.

  9. Kevin says:

    Because income is fixed and costs are variable, isn't in their best interests to lower costs? If they don't, they may end up eating some of that cost.