Patient and consumer groups praised HHS' release of an interim rule that directs how insurers should spend health plan premium dollars, while America's Health Insurance Plans said more attention needs to be paid to the cost of federally mandated investments to update claims coding.
On Monday, HHS said that beginning in 2011, health insurers will be required to spend 80% to 85% of consumers' premiums on direct care for patients and efforts to improve quality. The medical-loss ratio rules—which include a 60-day comment period—were issued as part of the Patient Protection and Affordable Care Act and are intended to give consumers more value for their money. Insurance companies that do not meet the medical-loss ratio standard are required to provide rebates to consumers. According to HHS, the regulations announced today certify and adopt recommendations submitted to HHS Secretary Kathleen Sebelius in October by the National Association of Insurance Commissioners.
"These new rules fill a hole in consumer protections in the majority of states," Kathleen Stoll, deputy executive director of the not-for-profit Families USA, said in a statement. "The rules make sure that, in every state, the lion's share of consumers' premiums will be used for quality medical services rather than be pocketed by insurance companies for CEO salaries, advertising, administrative costs and profits."
Next year, the new rules are intended to protect as many as 74.8 million insured Americans, and in 2012, as many as 9 million Americans could be eligible for rebates worth up to $1.4 billion, according to HHS. The average rebate per person could total $164 in the individual market, according to HHS.
According to AHIP's statement, the rules do acknowledge the potential for individual insurance market disruptions and make an effort to minimize those disruptions. "In addition, more consideration needs to be given to the cost of federally mandated investments in modernizing claims coding and the value of health plans' programs to prevent fraud," the statement's authors wrote.