A powerful Democratic senator is urging HHS and state insurance commissioners to implement tight regulations on how insurers can spend premium dollars under the new health reform law.
Rockefeller urges tight rules on medical-loss ratios
Sen. John Rockefeller (D-W.Va.) sent a letter to HHS Secretary Kathleen Sebelius and Jane Cline, president of the National Association of Insurance Commissioners, on the issue of medical-loss ratio. Under the health reform law, starting in 2011, health insurers must spend at least 85% of subscriber premiums on medical costs in group coverage plans, and at least 80% of premiums on medical costs for individual plans.
Rockefeller called this provision “one of the most important events for customers and small businesses before health insurance exchanges start operating in 2014,” according to the letter.
He wrote that medical-loss ratios should be aggregated and reported so that consumers living in a certain state or region can clearly see how insurers are spending premium dollars. And insurers should be required to demonstrate that their quality-improvement expenditures are benefiting consumers in order to be classified as medical expenses, Rockefeller wrote.
A spokesman for America's Health Insurance Plans, a trade group representing insurers, said the HHS regulations should not discourage health plans from administering quality-improvement programs.
Public comment on this minimum-loss-ratio provision of the health reform law closes on May 14, and draft regulations from the NAIC are expected June 1.
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