Under the reform law, large insurers will have to spend at least 85 percent of premiums on medical care, called the medical loss ratio, while smaller plans would have to spend at least 80 percent. Current medical loss ratios vary widely, with, for example, Aetna spending only 70 percent of the premium on medical care in New Jersey.
State insurance regulators have been asked to draft the rules, which they plan to submit to HHS on Oct. 21. Their latest draft of the proposed rule said insurers must meet the medical loss ratio at each plan, rather than meet an overall average for the whole company, which would allow more flexibility. Insurers note the reform law is expected to spawn more individual plans, which require higher administrative and marketing costs than group plans.
Read the Kaiser Health News report on health insurance.
Read more coverage on health insurance.
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–Top Democrats Threaten Insurers Who Blame Rate Increases on Reform Law
–Rising Deductibles Exacerbating Year-End Demand for Healthcare
