Insurance Officials Call for More Time To Define Medical-Loss Ratio Rules
On Tuesday, the National Association of Insurance Commissioners on Tuesday sent a letter notifying HHS Secretary Kathleen Sebelius that the group needs more time to determine the types of expenses that should be factored into medical-loss ratio rules under the new health reform law, the Washington Post reports.
Sebelius had asked the group to submit its recommendations on implementing the MLR by June 1 (Hilzenrath, Washington Post, 6/2).
Medical-Loss Ratios Under Reform
Under the overhaul, large health plans beginning on Jan. 1, 2011, will be required to spend at least 85% of premiums on medical services and quality improvement, rather than administrative costs or profits.
Individual and small-group health plans' MLR must be at least 80%. The new reform law will require insurers to pay a rebate to customers if their MLRs fall below the new limits (California Healthline, 5/10).
Sebelius asked NAIC to deliver the recommendations six months early to give insurers ample time to adjust to the new regulations, the Post reports.
In the letter, NAIC President Jane Cline and CEO Therese Vaughan wrote, "The medical loss ratio and rebate program ... have the potential to destabilize the marketplace and significantly limit consumer choices if the definitions and calculations are too restrictive," adding, "Equally, the medical loss ratio and rebate program could be rendered useless if the definitions and calculations are too broad" (Washington Post, 6/2).
They wrote, "Only through an open, deliberative process can we hope to reach a reasonable consensus that meets the dual objectives of protecting consumers and preserving competitive markets."
Cline and Vaughan also promised to keep Sebelius' office "updated on our progress" on developing the final definitions and calculation methodologies for the MLR (Letter text, 6/1).This is part of the California Healthline Daily Edition, a summary of health policy coverage from major news organizations. Sign up for an email subscription.