Recently in the news has been much discussion about rebates coming to consumers in Texas because of the Affordable Care Act provisions which require an insurance company to spend a certain percentage of the revenue collected in actual claims.
Last year consumers across the state of Texas received rebate checks in various amounts because of this provision in the law. This year, and in fact in the next 60 days a record number of Texas consumers will receive another rebate from insurance companies, however probably a little smaller than last year.
The provision requiring insurers to spend a set percentage of the premiums they collect on actual claims has proven time and time again to benefit consumers. In fact, insurance was originally designed to simply spread the risk and allowed the insurance company a small percentage of the premiums collected for putting the group together. Unfortunately, in Texas, insurance has become a major profit center at the expense of Texas families.
Many people decry the “mandate” contained in the Affordable Care Act requiring those without insurance to purchase health insurance. Previously, Texas property owners picked up the tab for uninsured people through property taxes in Texas.
Setting specific requirements not only serves to keep premiums down but benefits consumers enormously. One wonders why Texas leaders have not required auto insurance companies to similarly pay out a set percentage of the revenues collected to benefit Texas consumers. One estimate is that automobile insurance companies in the state of Texas pay as low as $.38 on the dollar they collect. Balanced against the “mandate” forced upon us in Texas requires to buy auto insurance, without such controls for price, there is little doubt that Texas families are getting the short end of the stick.
One wonders if campaign contributions had anything to do with the failure of Texas leaders to regulate the price of automobile insurance policies in the state of Texas?