Final Regulations on Medical Loss Ratio Issued

CMS has issued its final proposal on the medical loss ratio, which guarantees health insurers spend at least 80 percent (for individual and small group markets) or 85 percent (for large group markets) of consumer health insurance premiums on medical care instead of profit, overhead costs and marketing, according to a news release from the CMS Center for Consumer Information and Insurance Oversight.

The structure of the MLR is not changing, and the final regulations address technical issues in how to calculate and report the MLR and how to distribute rebates to enrollees. The changes in the new rule include the following:

•    Rather than having insurers send checks that could be taxed, workers in group health plans can receive tax-free rebates.
•    Increased transparency will allow consumers to receive a notice of the amount of the rebate but also what the health insurer's MLR means.
•    A change to a quality improvement definition will promote insurer improvements in defining or coding of medical conditions for a limited window of time.
•    Mini-med and expatriate plans are being phased down.

Related Articles on the Medical Loss Ratio:

GAO: Most Health Insurers Would Have Met Medical Loss Ratio Standards in 2010

11 Health Insurers Ordered to Refund $114.5M to New York Policyholders

HHS Grants Maine's Request to Hold Medical Loss Ratio at 65%

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