A committee of the National Association of Insurance Commissioners, which is drafting the regulations for HHS review, listed the following issues involving the medical loss ratio, the ratio between what is spent on healthcare and plan administration:
1. The panel proposes to calculate the medical loss ratio for each company by state. Health plans want it to be aggregated nationwide.
2. Deductions for most taxes from premiums would be included in the ratio, but Congressional Democratic leaders want a more restrictive definition.
3. Smaller health plans would be allowed adjustments over several years, to avoid penalizing them for a bad year with unusually large pay-outs.
4. Outreach services such as nurse hotlines and radiology benefit managers would be allowed as medical expenses on a case-by-case basis, provided they demonstrably improve care.
5. There may be a phase-in period for the new regulations in the individual insurance market. The panel said immediate implementation is likely to destabilize individual insurance markets.
The NAIC committee is expected to adopt a final proposal on Monday and send it to the full organization for a vote in mid-October. The reform law requires health plans to spend at least 80 percent and large-group plans to spend 85 percent of premiums on healthcare.
Read the Hill report on health insurance.
Read more coverage on health insurance:
– Insurers Seek Looser Rules on Ratio of Premiums Spent on Medical Care
– HHS Warns Insurers Against Pinning High Rate Increases on Reforms
– Top Democrats Threaten Insurers Who Blame Rate Increases on Reform Law
