Misc updates - MLR

The August 28th, 2009 blog entry Health care re-form VIII (More nonsense) introduced and discussed the "medical loss ratio." It also spoke to the use/misuse of this metric in the context of the health care reform (or more correctly, health insurance reform)... The June 27th, 2010 blog entry MLR update linked to articles discussing what insurance company expenditures should count towards the MLR calculation, while the August 24th, 2010 entry MLR Redux noted that the NAIC Executive Committee was putting together a recommended formula for calculating the MLR...

Some further developments:

• In September "... More than 30 state insurance commissioners lobbied President Obama and his senior policy staff on Wednesday to slow down the phase-in of the medical-loss ratio rule or risk driving insurers out of the market... ", see States want slower Medical-loss ratio phase in.
• On October the 21st, "... the Executive and Plenary committees of the National Association of Insurance Commissioners (NAIC) voted to adopt a model regulation containing the definitions and methodologies for calculating medical loss ratios as required by the Patient Protection and Affordable Care Act (PPACA). The model will be delivered to Health and Human Services (HHS) for certification by the Secretary...", per the NAIC press release...
• Some reaction to the proposed rules:

  • From the NAIC: "... “I commend the work of our regulators and staff as we considered a number of very challenging issues as it moved through the committee process. The committee model regulation on MLR passed with only technical amendments, which is a testament to our inclusive and transparent process ..."
  • From the insurers, via America's Health Insurance Plans (AHIP, their industry group), "... "The current MLR proposal will reduce competition, disrupt coverage, and threaten patients' access to health plans' quality improvement services."
  • From observers, State Regulators Recommend New Health Insurance Rules
  • And from HHS Secretary Kathleen Sibelius: "... We thank the NAIC for the recommendations, which the Commissioners finalized today on how best to implement the medical loss ratio policy, which will ensure consumers get the best value for their health care. We recognize that these recommendations are the result of many months of hard work by the Commissioners and their staff and we commend them for their open process and their responsible, thoughtful work.These recommendations are reasonable, achievable for insurers and will help to ensure insurance premiums are, for the most part, supporting health benefits for consumers. Not only do they ensure consumers receive better value for their health care dollar, they recognize special circumstances in different markets to preserve market stability and employee coverage as we transition to the new marketplace in 2014...."

HHS will soon be publishing the regulations to implement the recommendations. Stay tuned!