The National Association of Insurance Commissioners is inching closer towards defining the regulations that would require insurers to spend 80 to 85% of their premium dollars on health care. As The Hill reports, NAIC “approved model medical loss ratio regulations on Thursday” and sent Health and Human Services Secretary Kathleen Sebelius “a letter outlining several factors that need to be addressed as the guidelines are implemented.” Throughout the process, the key concerns have revolved around how to define medical services, which federal taxes can be excluded from the calculations, and whether or not companies can aggregate the ratios across different plans.
Insurers have waged a strong campaign to loosen the reporting requirements, leading Sen. Jay Rockefeller (D-WV) — who has led the charge in pressuring the NAIC to live up to the letter of the law and hold insurance companies accountable to its spirit — to write a letter to the NAIC urging the panel to “reject the health care industry’s eleventh-hour lobbying campaign to erode key consumer protections—protections that will help Americans finally get the care they pay for and deserve“:
In particular, the large for-profit insurers are asking you to ignore the plain-language definition of “health insurance issuer” in the ACA and other federal statutes, and allow insurers to aggregate their large group medical loss ratio data across state lines and business entities. As I discussed in my May 7 letter, allowing insurers to aggregate their medical loss ratio at a national level deprives the consumers of individual states of the new medical loss ratio law’s most important protections. Under the health insurance companies’ proposal, consumers in a state with medical loss ratios falling below the law’s new requirements would have no right to rebates, as long as the health insurance company’s overall national average remained above the law’s new requirements.
As regulators charged with implementing the ACA’s medical loss ratio provision, you have proceeded in good faith and through a transparent process to make sure that consumers and businesses get a better value for their health insurance premium dollars. Medical loss ratios aggregated at the state and entity level reflect the actual market conditions consumers and businesses in your state face when they are trying to buy health insurance. Insurance companies should not have the carte blanche to avoid paying rebates to consumers in states where they sell low-value plans.
The draft guidelines require issuers to break them down and account for the MLRs separately at every business unit in every state preventing them from obscuring some low MLR plans. The NAIC is preparing to vote and send their final recommendations to Sebelius sometime next week.