A few hours after he was sworn in as the new commissioner of the California Department of Insurance, Dave Jones said he wanted the state to make sure PPO health insurers spend 80% of their revenue on health benefit payouts.
That 80% figure is the new federal mandate, and Jones wants to make it clear to insurers that the state is going to check up on them and enforce that law, according to Janice Rocco, deputy commissioner of health policy for the DOI.
“Historically, the department has reviewed for 70% medical loss ratios in the individual market,” Rocco said. “Now that federal law meets 80% individual standards, we feel it’s important that the federal law be enforced at the state and federal level.”
Yesterday, Jones filed an emergency request with the Office of Administrative Law to establish that enforcement authority.
The OAL will open a five-day period for public comment, and is expected to rule on the request by the end of the month, Rocco said.
Insurers in California will conduct their own review of the plan and submit their opinions during that comment period, according to Anne Eowan, vice president of government affairs for the Association of California Life and Health Insurance Companies.
Insurers question the need for an emergency ruling and they’re concerned that state regulations might be inconsistent with federal rules, Eowan said.
“In general, our member companies are committed to complying fully with federal health reform and have taken great measures to meet any and all of the new rules being implemented and promulgated at both the state and federal level,” Eowan said.