Wednesday, September 29th, 2010 - 14:37
Wednesday, September 29, 2010 - 14:18
The time for a decision on medical loss ratios is drawing near, and employees at the Department of Health and Human Services are starting to feel the pressure.
The time is drawing near for the National Association of Insurance Commissioners to sign off on its recommendations for how the medical loss ratios should be implemented under health reform. They've released a draft rule, which will be voted on by commissioners next month. At that point, the final sign off authority goes to the Department of Health and Human Services -- where the mood is already a bit frantic, according to this interesting report on the Marketplace program for public radio.
The health reform law stipulates that 80 percent of premiums collected in the individual and small group market must go to medical care (and 85 percent in the large group market) or consumers must be reimbursed with a rebate. Of course, as you might guess, that stipulation doesn't come close to deciding the details of how these regulations should be implemented. And that's where the fight is currently being waged between the insurance industry and consumer advocates.
Insurers want to be able to count as much of their operations as they can under the definition of medical care. Consumer advocates -- and many of the Democrats who supported this provision in health reform -- say the whole point of the change is to make sure that insurers are operating as efficiently as possible and not spending too much on profits, salaries and overhead.
With the draft rule released last week by the NAIC, insurers scored a win in being allowed to deduct certain taxes from the denominator for their MLR calculation. But as the radio piece points out, the draft rule doesn't allow insurers' fraud prevention efforts or their marketing expenses to count as medical care. It may seem reasonable to consider those expenses as being separate from medical care -- not in the eyes of insurers.
Meanwhile, some insurance officials in the states are asking for a phase in of the MLR because of fears that insurers will out of the market, leaving nothing in its wake. While the NAIC is taking care of the nitty-gritty (with some communication with HHS), the buck on this crucial component of health reform stops with HHS.
That's why they are so harried.
Any insurance company's bottom line is profit. How often have average Americans had to fight with insurers about medical costs and medication. If this goes through consumers have an IOU in the form of lower premiums or a payed rebate. Help make this happen.