Arnold Kling points out how mandating a minimum medical loss ratio promotes poor customer service. Quoting Uwe Reinhart:
The recently passed Affordable Care Act requires heath insurance issuers to use at least some minimum fraction of revenue from the premiums it receives on medical services.
A big cost component for health insurance companies is customer service. In competitive markets, insurance companies answer the phone. But some states discourage health insurers with regulation, so that we end up with near-monopolies in the individual and small-group market. …
But under the new health care law, health insurance companies are supposed to act as pure conduits between premium-payers and health-care providers. So what the new “health care reform” law does is provide incentives for health insurance companies to cut back on customer service.
Read the whole post: Mandatory Bad Customer Service.
You might think there’s a conspiracy to make nominally “private” insurance so unpleasant that the only alternative appears to be a complete government take over.