Insurance Officials Say Medical-Loss Regulations Could Come by August

On Thursday, officials with the National Association of Insurance Commissioners said they plan to complete guidelines to define administrative and medical spending under medical-loss ratio rules that are part of the new health reform law by mid-August, CQ HealthBeat reports (Reichard, CQ HealthBeat, 7/22).

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 on administrative costs or profits (California Healthline, 6/16).

Although the new reform law requires the recommendations to be made by year's end, federal health officials have urged the group to submit the draft guidelines by the end of May to give insurance companies ample time to adjust to the new regulations.

Florida Insurance Commissioner Kevin McCarty, an NAIC member, said the panel working on the recommendations is working to set the regulations before the end of the year.

NAIC President Jane Cline said, "Our goal is to get it as right as we can but recognizing that we have a limited timeline to do that because the industry has to know what HHS is going to certify" (CQ HealthBeat, 7/22).

Senators, Liberal Group Call for Tight Insurer Spending Controls

Two Senate Democrats and a liberal advocacy group have requested that NAIC draft tight restrictions on how health insurance companies can spend premium revenue under the new reform law.

On Thursday, Sen. Al Franken (D-Minn.), who introduced the MLR rules as an amendment to the overhaul legislation, joined Health Care for America Now officials at a press conference to make the request.

HCAN also released a new report that found spending ratios are below those required in the new law in various markets and states nationwide. The report also suggested that insurers would have been required to pay $1.9 billion in rebates to consumers if the new law had been implemented in 2009 (Pecquet, "Healthwatch," The Hill, 7/22).

Meanwhile, Sen. Jay Rockefeller (D-W.Va.) this week sent a letter to NAIC urging the group to resist lobbying efforts by insurers to ease the MLR standards (CQ HealthBeat, 7/22).