State Insurance Leaders Request Adjustment to Medical-Loss Ratio Rules
On Wednesday during a meeting at the White House with Obama administration officials, insurance officials from several states requested a gradual enactment of the medical-loss ratio rules under the federal health reform law to prevent potential disruptions in their states' insurance markets, CQ HealthBeat reports.
The meeting involved members of the National Association of Insurance Commissioners from 32 states, two territories and the District of Columbia, and HHS Secretary Kathleen Sebelius, Labor Secretary Hilda Solis and President Obama joined the discussion for a brief period of time (Norman, CQ HealthBeat, 9/22).
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. Individual and small-group health plans' MLR must be at least 80% (California Healthline, 8/18).
The law would require insurers to pay a rebate to customers if their MLRs fall below the new limits, but the rebate was not among the items discussed at Wednesday's meeting.
During the meeting, officials from Iowa and Maine asked the Obama administration for waivers to gradually phase in the MLR rules through 2014, while officials from Florida indicated that they are in the process of gathering more information to make a similar request.
The officials said they were concerned that insurers might withdraw from the individual insurance market next year if they are unable to comply with the MLR requirements (CQ HealthBeat, 9/22).
NAIC President and West Virginia Insurance Commissioner Jane Cline said that a phased-in approach also would help avoid disruptions to small businesses (Pear, New York Times, 9/22).
Kansas Insurance Commissioner Sandy Praeger, chair of NAIC's health reform work group, said the reform law authorizes Sebelius to grant states the option to gradually implement the MLR spending requirements over time.
Praeger acknowledged that while it might not be feasible for HHS to grant all states that option, the agency could provide guidance and flexibility to comply with the regulations (McCarthy, CongressDaily, 9/23).
Last month, NAIC approved a "blanks" proposal that defines the types of services, fees and other spending that health insurers can count as medical spending under the MLR rules, which HHS is expected to use to implement the MLR rules and reporting requirements (California Healthline, 8/18).