Maine Insurers Receive First Medical Spending Change Under Reform
On Tuesday, HHS granted the first adjustment to the medical-loss ratio rules in the federal health reform law, allowing insurers in Maine's individual market to spend at least 65% of premiums on direct medical costs instead of the 80% to 85% mandated by the overhaul, Modern Healthcare reports (Vesely, Modern Healthcare, 3/8).
Under the overhaul, large health plans now are 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 law would require insurers to pay a rebate to customers if their MLRs fall below the new limits.
The final MLR regulations included an outline of how state health insurance regulators could apply for a ratio adjustment in their individual market (California Healthline, 11/29/10).
Details of Maine's Adjustment
HHS' decision to give Maine insurers a three-year reprieve followed comments from MEGA Life and Health Insurance -- one of three insurers in the state offering individual coverage -- which said it likely would pull out of the market if its minimum loss ratio was 80% (Adams, CQ HealthBeat, 3/8).
MEGA provides 37% of the state's individual plans, while Anthem Blue Cross Blue Shield of Maine provides 49% and HPHC Insurance Company provides 13% (Pecquet, "Healthwatch," The Hill, 3/8).
Kentucky, Nevada and New Hampshire also have requested adjustment applications (Modern Healthcare, 3/8).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.