Aetna CEO explains how health reform’s MLR will influence premium pricing

Advertisement

The health insurance market, as federal health reform continues to be implemented, “continues to be rational,” the CEO of Aetna said recently.

Mark Bertolini, CEO of Aetna

Mark Bertolini

Mark Bertolini, who also is president of the national health insurer, did acknowledge that “pockets of irrational behavior or irrational from out point of view from time to time” exist.

Speaking to investors during the company’s earnings conference call earlier in February, Bertolini said his company has rejected the idea of pricing to meet the new requirements of the health reform law, passed in March 2010. The law forces health insurers to invest 80% of individual and small-group premiums, and 85% of large-group premiums on medical costs.

“We have heard of some competitors pricing to the MLR target going forward,” he said, not identifying the companies. “We have considered that strategy and don’t consider that to be appropriate for us. So we continue to price to trend and appropriate profit margin and we’ll let, call it, the cards fall where they may.”

3 Responses

  1. maxine casalbore Says:

    I beleive most all of the health carriers are more concerned about their investors these days and less concerned about the true care of their insureds. We need the Feds and the States to keep reign on the health carriers as they have become the 400 pound gorilla’s in our lives and will continue to weild their strength, if not carefully monitored. We will continue to see a spiriling cost of premiums with paired down benefit packages, if we don’t have some sort of check and balance. This is why the MLR needs to be in place.

  2. Kelly Dobs Says:

    Maxine,
    Your are sadly very misled by the media and liberal government on this matter.
    By blaming only the health insurers and not also looking at how to reign in hospital and doctor costs, you will only solve a small piece of the medical puzzle and when insurers are no longer able to operate because doctors and hospital still demand more while premiums must be reduced, we will all end up on Medicaid.
    Thnaks but no thanks. A single payer system (payer being Uncle Sam) is no way to fix this problem.
    MRL constraints also put a heavy burden on people who work for these carriers. They already get crappy benefits (I know, my benefits have been slashed so badly I barely have insurance from a well known national insurance company), and salaries will be cut, which may be fine for the high paid executives, but what about the barely above minimum wage person processing the claims or answering the phones. The carriers will outsource these services (some alreay have) to foreign countries adding to our own unemployment.
    Aetna is taking a responsible position. Screw the MLR rule and if they make more money than they are supposed to, they’ll issue rebates like they have done in the past.

  3. Jim Kosek Says:

    Mr Bertolini is lying that Aetna is not pricing their insurance according to the federal mandates. They have already cut agent commissions on individual health care policies by 66%. This is in direct response to the MLR mandate and required profit reduction. They have priced agent commissions in direct response to the law. Is he saying agent commissions have no bearing on pricing? By law they are a part of the MLR mandate, so they must be a part of the insurance pricing equation. Of course Mr’ Bertolini neglected to tell that to Aetna investors. Yes, he’s right, there are pockets of “irrational behavior”. One of those pockets are coming right from Mr. Bertolini’s office.

Leave a Comment

Follow IFAwebnews: 
Important links and updates throughout the day via Twitter Join IFAwebnews’ Insurance News group on LinkedIn.com Become a fan of IFAwebnewss Insurance News on Facebook Feeds for all the ourinsurance news or just the lines you need. Insurance news delivered to your inbox
© 2013 New Horizon Group, Inc. :: Insurance & Financial Advisor | IFAwebnews.com :: NS 257 queries. 0.764 seconds.