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The cost of repealing the health care law: Quality care from insurance companies

Mitt Romney is continually promising to repeal health care reform, recently saying once again that “the best course is to repeal Obamacare.”

But Romney’s campaign promise could allow insurance companies to continue discriminatory and profit-driven practices at the expense of quality health care for millions of Americans. Take a look at just one of the ways Romney’s repeal would let insurance companies continue business policies that make quality health care the last priority.

Before the Affordable Care Act

  • Insurance companies can spend “a substantial portion of consumers’ premium dollars on administrative costs and profits, including executive salaries, overhead, and marketing” instead of medical care and services.

  • 20 percent of Americans who buy insurance coverage are in plans that spend more than 30 cents for every dollar on administrative costs. Another 25 percent of Americans have plans that spend 25 to 30 cents of every dollar on administrative costs. There are even extreme cases where companies spend more than 50 percent of each dollar on their own operating costs.

With the Affordable Care Act

  • Under health reform, insurance companies must spend at least 80 percent of their premium dollars on medical care and improving health care quality instead of on administrative costs, making sure that “consumers will receive more value for their premium dollar.”

  • With this “80/20 rule,” any company that doesn’t spend at least 80 percent of the premium dollars on better care delivery will have to provide rebates for its consumers.

  • Under the new “rate review” program, companies must also now justify any rate increase that is 10 percent or higher before the rate change takes effect.

Who will Romney’s repeal hurt?

The new rules under the Affordable Care Act help protect as many as 74.8 million insured Americans. If Romney gets rid of these protections with a repeal, insurance companies could continue to manipulate rates to meet their administrative needs while Americans fail to get the quality health care that they pay for.