# The Patient Protection Act Is About To Put $1.3 BILLION Back In Consumers' Pockets **URL:** \ **Category:** Great Debates\ **Created:** [May 12, 2012, 2:19am UTC](https://boards.straightdope.com/t/the-patient-protection-act-is-about-to-put-1-3-billion-back-in-consumers-pockets/621665 "2012-05-12T02:19:13Z")\ **Posts on this page:** 16\ **Page:** 4
**Author:** ![Fotheringay-Phipps](https://avatars.discourse-cdn.com/v4/letter/f/d9b06d/32.png) [@Fotheringay-Phipps](https://boards.straightdope.com/u/Fotheringay-Phipps)\ **Post date:** [May 14, 2012, 9:06pm UTC](https://boards.straightdope.com/t/the-patient-protection-act-is-about-to-put-1-3-billion-back-in-consumers-pockets/621665/61 "2012-05-14T21:06:49Z")
> [@Damuri\_Ajashi](#): > > 20% is not profit, its an 80% medical loss ration. IOW 80% of the money of the money has to go to paying medical costs; that does not include stuff like sales commissions, taxes, salaries, overhead and a bunch of other stuff. As a comparison, medicare’s medical loss ratio is in excess of 98%. I think it’s actually lower than 98%. But it’s a misleading number in any event, because the Medicare population has much higher per capita medical costs and much of the admin costs are per person rather than a percentage of claims. > [@](#): > > The medical loss ratio is (medical losses/gross premiums). We have a pretty good idea of what cosntitutes “medical losses” and its proven very difficult to increase the size of the numerator Not completely clear, and there was a lot of heavy duty lobbying around whether things like coordination of care is properly counted as medical losses or admin. > [@](#): > > so yes, there is some focus on reducing the size of the denominator but its not anywhere as simple as creating a separate line item for sales commissions, those items will probably still be considered “gross premiums” I don’t know where your information is from but it’s widely assumed in the industry that these items will be restructed, if it hasn’t happened already. ---
**Author:** ![Shodan](https://avatars.discourse-cdn.com/v4/letter/s/9f8e36/32.png) [@Shodan](https://boards.straightdope.com/u/Shodan)\ **Post date:** [May 14, 2012, 9:12pm UTC](https://boards.straightdope.com/t/the-patient-protection-act-is-about-to-put-1-3-billion-back-in-consumers-pockets/621665/62 "2012-05-14T21:12:23Z")
> [@Damuri\_Ajashi](#): > > You mean like how taxes are never out of the economy? I think you may have misunderstood me. The blogger quoted in the OP thinks that the PPA was going to put money back in the economy, which is factually wrong. Are you asserting that they are? And be careful of including the word “never”, which I did not assert. Regards, Shodan ---
**Author:** ![Kearsen](https://avatars.discourse-cdn.com/v4/letter/k/82dd89/32.png) [@Kearsen](https://boards.straightdope.com/u/Kearsen)\ **Post date:** [May 15, 2012, 2:29pm UTC](https://boards.straightdope.com/t/the-patient-protection-act-is-about-to-put-1-3-billion-back-in-consumers-pockets/621665/63 "2012-05-15T14:29:52Z")
> [@Lobohan](#): > > A better question, is when you read this link, and find out that what you posted isn’t true, will you revise your opinions in an honest fashion? > > [http://www.nationalreview.com/corner/293932/no-obamacare-s-costs-didn-t-double-patrick-brennan#](http://www.nationalreview.com/corner/293932/no-obamacare-s-costs-didn-t-double-patrick-brennan#) When does Obamacare take effect and why would anyone use 2009 numbers to estimate cost in 2014? Because they were told to: who exactly is being dishonest again? ---
**Author:** ![Mdcastle](https://avatars.discourse-cdn.com/v4/letter/m/958977/32.png) [@Mdcastle](https://boards.straightdope.com/u/Mdcastle)\ **Post date:** [May 16, 2012, 5:14pm UTC](https://boards.straightdope.com/t/the-patient-protection-act-is-about-to-put-1-3-billion-back-in-consumers-pockets/621665/64 "2012-05-16T17:14:01Z")
I’m not saying there aren’t some, but I’d like to know what companies have \>20% overhead. The company I work for is under 10%, and although it’s nonprofit, it’s a “premium” brand in the market. As far as Medicares overhead, part of the effiency is that instead of negotiating contracts with every provider they just pay them all the same rate (adjusted to take into consideration how expensive the area is) so there’s not negotiating and fewer rate structures. Also, they don’t do disease management (our company has a staff of RNs to help people manage their diabetes and whatnot). and fund public health initiatives, like PSAs and bike sharing programs. You may or may not want part of your premium to go to these things; I’m just commenting their part of the difference in overhead. ---
**Author:** ![Lobohan](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/lobohan/32/79_2.png) [@Lobohan](https://boards.straightdope.com/u/Lobohan)\ **Post date:** [May 16, 2012, 5:26pm UTC](https://boards.straightdope.com/t/the-patient-protection-act-is-about-to-put-1-3-billion-back-in-consumers-pockets/621665/65 "2012-05-16T17:26:13Z")
> [@Kearsen](#): > > When does Obamacare take effect and why would anyone use 2009 numbers to estimate cost in 2014? Because they were told to: who exactly is being dishonest again? Reread the article. The CBO does things in ten year chunks. ---
**Author:** ![BigT](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/bigt/32/12044_2.png) [@BigT](https://boards.straightdope.com/u/BigT)\ **Post date:** [May 16, 2012, 8:42pm UTC](https://boards.straightdope.com/t/the-patient-protection-act-is-about-to-put-1-3-billion-back-in-consumers-pockets/621665/66 "2012-05-16T20:42:14Z")
> [@Bricker](#): > > Shayna, read the law itself, and not some “administration official” with a self-serving lie. I know it’s hard to read yourself away from the echo chamber of publications that reinforce your view, but it’s possible. I read the SDMB in large part because so many people here don’t share my viewpoint, and I’m willing to hazard a guess that you don’t do something similar. > > . So what’s the excuse for this post? All attack and no facts. It would seem to be trying to convince people to believe Shayna, seeing as, when you have facts you usually bring them. And I don’t know what your other post is going on about. Proving something biased doesn’t necessarily disprove the alleged facts it contains. Perhaps the “polite” version would provide arguments that the blog’ facts are wrong. If so, why not post it here? ---
**Author:** ![Damuri\_Ajashi](https://avatars.discourse-cdn.com/v4/letter/d/898d66/32.png) [@Damuri\_Ajashi](https://boards.straightdope.com/u/Damuri_Ajashi)\ **Post date:** [May 17, 2012, 3:24pm UTC](https://boards.straightdope.com/t/the-patient-protection-act-is-about-to-put-1-3-billion-back-in-consumers-pockets/621665/67 "2012-05-17T15:24:50Z")
> [@Fotheringay-Phipps](#): > > I think it’s actually lower than 98%. > **[A Q&a On The Health Care Industry | Sick Around America | FRONTLINE | PBS](http://www.pbs.org/wgbh/pages/frontline/sickaroundamerica/consumer/industry.html)** “Medicare is very efficient. About 98 to 99 percent of their revenue goes out in paying claims.” > [@](#): > > But it’s a misleading number in any event, because the Medicare population has much higher per capita medical costs and much of the admin costs are per person rather than a percentage of claims. 1-2% administrative costsw versus 20% administrative costs are largely the result of differences in per insured administrative overhead? > [@](#): > > Not completely clear, and there was a lot of heavy duty lobbying around whether things like coordination of care is properly counted as medical losses or admin.I don’t know where your information is from but it’s widely assumed in the industry that these items will be restructed, if it hasn’t happened already. I think the regulations (at least temporary regulations) have either been issued or the content of the regulations are widely known. There are some costs (like coordination of care) that might require some internal restructuring to be counted as medical loss rather than admin but the line is pretty well drawn. Its kind of how these companies know how much to return to the policyholders. > [@Shodan](#): > > I think you may have misunderstood me. The blogger quoted in the OP thinks that the PPA was going to put money back in the economy, which is factually wrong. Are you asserting that they are? And be careful of including the word “never”, which I did not assert. I am asserting that this puts money back in the economy about as much as reducing taxes puts money back in the economy. Or do taxes fall into a black hole? > [@Mdcastleman](#): > > I’m not saying there aren’t some, but I’d like to know what companies have \>20% overhead. The company I work for is under 10%, and although it’s nonprofit, it’s a “premium” brand in the market. As far as Medicares overhead, part of the effiency is that instead of negotiating contracts with every provider they just pay them all the same rate (adjusted to take into consideration how expensive the area is) so there’s not negotiating and fewer rate structures. Also, they don’t do disease management (our company has a staff of RNs to help people manage their diabetes and whatnot). and fund public health initiatives, like PSAs and bike sharing programs. You may or may not want part of your premium to go to these things; I’m just commenting their part of the difference in overhead. The 20% was not picked out of thin air. The government asked the health insurance lobby to come up with a number and they came up with a number that almsot every insurance company in the country could meet and even then several that couldn’t meet it asked for waivers and got them. ---
**Author:** ![Fotheringay-Phipps](https://avatars.discourse-cdn.com/v4/letter/f/d9b06d/32.png) [@Fotheringay-Phipps](https://boards.straightdope.com/u/Fotheringay-Phipps)\ **Post date:** [May 17, 2012, 4:36pm UTC](https://boards.straightdope.com/t/the-patient-protection-act-is-about-to-put-1-3-billion-back-in-consumers-pockets/621665/68 "2012-05-17T16:36:17Z")
> [@Damuri\_Ajashi](#): > > [http://www.pbs.org/wgbh/pages/frontline/sickaroundamerica/consumer/industry.html](http://www.pbs.org/wgbh/pages/frontline/sickaroundamerica/consumer/industry.html) > > “Medicare is very efficient. About 98 to 99 percent of their revenue goes out in paying claims.” That’s misleading because much of the Medicare administration is done by other parts of the government bureaucracy or is otherwise not included in the admin fugure. See [CAHI - CFAH](http://www.cahi.org/cahi_contents/resources/pdf/CAHI_Medicare_Admin_Final_Publication.pdf) for some details about this comparison. (Note: CAHI appears to be an industry lobbying group, but Milliman who did the study is a major and very respectable actuarial firm. In any event, the points they make seem valid.) > [@](#): > > 1-2% administrative costsw versus 20% administrative costs are largely the result of differences in per insured administrative overhead? That’s not all of it - see the link above - but it’s a part of it. > [@](#): > > The 20% was not picked out of thin air. The government asked the health insurance lobby to come up with a number and they came up with a number that almsot every insurance company in the country could meet This is not believable and has to be either distorted or false. Cite, please. ---
**Author:** ![dngnb8](https://avatars.discourse-cdn.com/v4/letter/d/977dab/32.png) [@dngnb8](https://boards.straightdope.com/u/dngnb8)\ **Post date:** [May 17, 2012, 5:43pm UTC](https://boards.straightdope.com/t/the-patient-protection-act-is-about-to-put-1-3-billion-back-in-consumers-pockets/621665/69 "2012-05-17T17:43:16Z")
$4 bucks, WOOT!. Just in time to offset the Cadillac Costs coming down the road… ---
**Author:** ![Fotheringay-Phipps](https://avatars.discourse-cdn.com/v4/letter/f/d9b06d/32.png) [@Fotheringay-Phipps](https://boards.straightdope.com/u/Fotheringay-Phipps)\ **Post date:** [May 17, 2012, 9:10pm UTC](https://boards.straightdope.com/t/the-patient-protection-act-is-about-to-put-1-3-billion-back-in-consumers-pockets/621665/70 "2012-05-17T21:10:14Z")
Actually by the time the Cadillac costs come into effect (2018) you’ll have long forgotten about the $1.3B, in favor of other taxes that come into effect long before that. For example, under Section 9010 of PPACA (i.e. the HCR law) there is a tax on all insured health plans, beginning at $8B in 2014 and rising to $14.3B in 2018, and increasing by health care inflation thereafter. (Unlike most taxes, the total tax is fixed at these numbers, and will be allocated to the insurers based on their percentage of total premiums paid.) The insurers will pass along these taxes to anyone buying health insurance. [Actually it’s worse than that, because by law, this tax is not tax deductible for the insurance companies, which means they are going to pay corporate income tax on the extra premiums that they collect to pay the tax. Guess who they will pass that extra tax along to - hint: it won’t be the tooth fairy.] One might expect that people like the OP will then start threads in GD with titles like “The Patient Protection Act Is About To Take $8 BILLION in Taxes Out Of Consumers’ Pockets”. But don’t bet too heavily on that. ---
**Author:** ![colonial](https://avatars.discourse-cdn.com/v4/letter/c/34f0e0/32.png) [@colonial](https://boards.straightdope.com/u/colonial)\ **Post date:** [May 18, 2012, 4:53pm UTC](https://boards.straightdope.com/t/the-patient-protection-act-is-about-to-put-1-3-billion-back-in-consumers-pockets/621665/71 "2012-05-18T16:53:24Z")
> [@Buck\_Godot](#): > > Even though it is about 4 times the amount of money the government spends on planned parent hood, 5 times the amount of federal funding that goes to public broadcasting, 10 times the amount of funding for the national endowment for the arts? Yes. > [@Buck\_Godot](#): > > Personally I would be willing to call it a drop in the bucket, if the conservatives would quit whining about the spending on these programs. Conservative whining about PP-PBS-NEA has nothing to do with the fact that $80 per capita is a drop in the bucket. And incidentally I myself do not object to past and present PP-PBS-NEA spending levels. ---
**Author:** ![Kearsen](https://avatars.discourse-cdn.com/v4/letter/k/82dd89/32.png) [@Kearsen](https://boards.straightdope.com/u/Kearsen)\ **Post date:** [May 18, 2012, 5:05pm UTC](https://boards.straightdope.com/t/the-patient-protection-act-is-about-to-put-1-3-billion-back-in-consumers-pockets/621665/72 "2012-05-18T17:05:02Z")
> [@Lobohan](#): > > Reread the article. The CBO does things in ten year chunks. Please stop defending the dishonest accounting techniques. A bill’s cost should be the bills cost but since it doesn’t jive with what the people writing the thing want it to be they list criteria that will alter the bottom line. Like changing years. ---
**Author:** ![Lobohan](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/lobohan/32/79_2.png) [@Lobohan](https://boards.straightdope.com/u/Lobohan)\ **Post date:** [May 18, 2012, 6:39pm UTC](https://boards.straightdope.com/t/the-patient-protection-act-is-about-to-put-1-3-billion-back-in-consumers-pockets/621665/73 "2012-05-18T18:39:01Z")
> [@Kearsen](#): > > Please stop defending the dishonest accounting techniques. A bill’s cost should be the bills cost but since it doesn’t jive with what the people writing the thing want it to be they list criteria that will alter the bottom line. Like changing years. No, you don’t understand. Stop and think for just one moment. The CBO gives the price quote for ten years in 2009. Then they give another price quote from 2012. They do it in ten year chunks. It’s not being dishonest, it’s you not understanding the issue. The reason the ACA was designed to roll in was so there would be time to build the infrastructure. You do know that you couldn’t ride on the interstates until they were built, right? Similarly, you can’t purchase insurance at an exchange until they exist, right? Again, because this is simply you not understanding the issue: The CBO gives costs in ten year chunks. The first ten years is less than the ten years starting in 2012 because half of the program isn’t constructed yet. That said, the CBO says that the ACA will save us money. We aren’t losing money. Nitpick: The word is _jibe_. ---
**Author:** ![Bricker](https://avatars.discourse-cdn.com/v4/letter/b/977dab/32.png) [@Bricker](https://boards.straightdope.com/u/Bricker)\ **Post date:** [May 18, 2012, 6:45pm UTC](https://boards.straightdope.com/t/the-patient-protection-act-is-about-to-put-1-3-billion-back-in-consumers-pockets/621665/74 "2012-05-18T18:45:13Z")
> [@Lobohan](#): > > Nitpick: The word is _jibe_. Not according to the Bee-Gees. ---
**Author:** ![Fotheringay-Phipps](https://avatars.discourse-cdn.com/v4/letter/f/d9b06d/32.png) [@Fotheringay-Phipps](https://boards.straightdope.com/u/Fotheringay-Phipps)\ **Post date:** [May 18, 2012, 8:56pm UTC](https://boards.straightdope.com/t/the-patient-protection-act-is-about-to-put-1-3-billion-back-in-consumers-pockets/621665/75 "2012-05-18T20:56:51Z")
> [@Lobohan](#): > > That said, the CBO says that the ACA will save us money. We aren’t losing money. They said it would reduce the deficit. Not save us money. Even what they said is incorrect and misleading, but even they never claimed it would save money. [If the government spends $1 and then raises taxes by $2, that reduces the deficit. It dos not “save us money”.] ---
**Author:** ![Lobohan](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/lobohan/32/79_2.png) [@Lobohan](https://boards.straightdope.com/u/Lobohan)\ **Post date:** [May 18, 2012, 9:04pm UTC](https://boards.straightdope.com/t/the-patient-protection-act-is-about-to-put-1-3-billion-back-in-consumers-pockets/621665/76 "2012-05-18T21:04:06Z")
> [@Fotheringay-Phipps](#): > > They said it would reduce the deficit. Not save us money. > > Even what they said is incorrect and misleading, but even they never claimed it would save money. > > [If the government spends $1 and then raises taxes by $2, that reduces the deficit. It dos not “save us money”.] Reducing the deficit saves us the money that would service that debt. Also, it is slowing the rising of health care costs. [Previous page](https://boards.straightdope.com/t/the-patient-protection-act-is-about-to-put-1-3-billion-back-in-consumers-pockets/621665.md?page=3)