The state of Maine has requested that it be exempted from that portion of Obamacare, about to go into effect soon, which dictates that “insurers must devote at least 80 percent of the premiums they collect to medical claims or other activities that improve customers’ health – leaving no more than 20 percent for the insurer’s administrative costs or profits.”
Maine (and a host of other states who haven’t yet made the same formal request) is afraid that the provision would make it so difficult for insurers in the risky individual market to keep going financially that the companies will abandon that market. Thus, the request for the waiver.
Isn’t it odd how so many things that those mean old avaricious old greedy old insurance companies were doing were just good monetary policy, necessary for them to stay afloat? That individual insurance has become the last refuge of those who are more ill and use more health care resources than others, and that’s why it’s more expensive? That government high risk pools can only work out if everyone, especially the young and healthy, is forced to buy insurance to help the others?
In other words, that there is no free lunch. Fancy that.
Much better to ignore that fact, though, and pretend that mathematics has been suspended for the purpose of feeling a warm glow about how kind we are to the poor and sick, whether or not we’ve actually taken the trouble to think about the inherent problems involved in so doing. If we faced reality for a change, we might even be able to devise a better system, although it might end up involving less government involvement rather than more.