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Ed Carstens: ‘Obamacare’ clarification

Posted: December 14, 2012 2:00 a.m.
Updated: December 14, 2012 2:00 a.m.

You recently published the letter “Insurance freebies not so free” (Dec. 5) in which the writer closed with, “I guess those ‘freebies’ that were promised in the new health care law are not so free after all.”

I don’t know what “freebies” the writer refers to, but apparently the writer believes that Obamacare was supposed to prevent health insurance companies from raising their rates. Of course it does not.

Although Obamacare is only beginning to be implemented, it is already offering some benefits for consumers.

That same morning, Dec. 5, the Los Angeles Times published the article “‘Obamacare’ refunds go to consumers.” The opening paragraph states, “Consumers saved nearly $1.5 billion in 2011 as a result of rules in President Obama’s health care law that limit what insurance companies can spend on expenses unrelated to medical care, including profit. ...”

The new law requires insurers to limit their profits and administrative overhead (executive pay, marketing, lobbyists, lawyers, employees, computer systems etc.) to 20 percent of revenue rather than the typical 25 to 30 percent. (For comparison, Medicare administrative overhead is around 3 percent).

It seems that much of the opposition to Obamacare comes from people who really don’t understand what is or is not in the plan.


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