On Monday, after months of negotiation and deliberation within the National Association of Insurance Commissioners (NAIC), the Department of Health and Human Services (HHS) issued interim-final regulations requiring health insurers to spend 80 to 85 percent of premium dollars on health care services. Insurers that fail to meet the new standards — called the Medical Loss Ratio or MLR — will have to issue rebates to beneficiaries.

The new rules have received mixed reviews from consumer advocates and insurers alike. Many of the nation’s largest insurance companies’ stocks actually “rose on the news Monday,” leading one analyst to speculate that the market was reacting to the end of a period of uncertainty for insurers, and that the regulations ended up “somewhat more positive than expected.” Indeed, the group Consumer Watchdog — an consumer advocates’ organization — argues that while “HHS deserves credit for resisting a lobbyist onslaught demanding more loopholes,” the agency “also left intact some of the industry’s chief goals, including over-broad tax deductions and loose definitions of ‘health quality improvements’ that will artificially boost the health care ratios (also known as medical loss ratios) of all insurers.” The group has identified the following problems:

1. Inclusion of public health marketing campaigns as “health quality improvements.” The NAIC proposal would allow insurance companies to count as health care certain marketing costs—such as anti-tobacco or anti-obesity messages—that are largely intended to improve a corporate image.

2. Excessive tax deductions. The proposed regulations would allow insurers to deduct almost all federal and state taxes, including income taxes, from their premium revenue before calculating the medical loss ratio.

3. Lack of transparency for administrative costs counted as “health quality improvements,” including: provider accreditation fees, prospective utilization review and telephone hotlines. Each of these activities is generally considered a cost-reduction, claims adjustment or administrative activity.

4. “Mini-med” plans: In a newly developed regulation, HHS announced a major exception to the MLR rules of so-called “mini-med” health insurance plans, which limit employee benefits to as little as a few thousand dollars a year. Such plans, mostly used in the retail and fast food industries, and for part-time employees, will be allowed minimum health care ratios as low as 40% (as opposed to the 85% level of conventional employee insurance). The exception is currently allowed for one year, and must not be allowed to continue beyond a year.

In a release issued on Monday, Sen. Jay Rockefeller (D-WV) expressed concern about the mini-med exemption saying, he was “disappointed that limited benefit ‘mini-med’ plans continue to seek exceptions from these standards,” but that “they should know that their requests will be subject to close scrutiny.” The Senator also announced that he would be holding hearings on the policies on Wednesday, December 1 at 2:30 p.m.

Hopefully, this will be the first of many. Regulators and Congress will have to keep a close eye on how insurers abide by the new standards to ensure that the industry doesn’t inflate its MLR numbers without actually delivering more efficient care.

The Center on Budget and Policy Priorities’ Edward Park offers this very concise explanation of what would happen if states opt outed of the Medicaid program, sent back the federal matching rate, and tried to stretch their remaining contributions. Remember, these states believe that they can transfer individuals between 100% and 133% of the federal poverty line into the exchanges — where beneficiaries at these income levels would potentially qualify for federal subsidies — and actually save money by covering only the remaining population. Park argues that this will prove impossible:

Since states will be unable to shift most of their Medicaid beneficiaries — and very few of the higher-cost people who constitute the bulk of current spending — into the exchanges, they’d have to somehow make up for the loss of these federal funds.

Unless states were willing to as much as triple their current contributions to the cost of health care, they would have to severely curtail their health care spending.. Many would likely end up eliminating publicly funded coverage for large numbers of low-income children, pregnant women, parents, people with disabilities, and seniors. Most of these people could well end up uninsured

For the people who remained eligible for publicly funded coverage, states might scale back benefits. Possible reductions include benefits that are important to people with disabilities and children with special health care needs, such as mental health care and therapy services, which Medicaid covers but private insurance typically doesn’t. States might also increase cost-sharing charges, which means fewer people would receive needed health care.

And although states have already sharply reduced their reimbursement rates for Medicaid providers (such as doctors and hospitals) to help close their budget deficits, they would have to further lower their rates — at the same time that providers would face rising costs for uncompensated care costs as the ranks of the uninsured swell.

And of course while states would be stretching their state contributions, the federal government would have to spend more to cover the Medicaid population (assuming they could qualify for subsidies). The infusion of Medicaid patients could also tilt the composition of the risk pools and further increase premiums.

Texas Gov. Rick Perry (R) has brought Medicaid opt-out to the national stage, but it’s on the very periphery of conservative thought. Republicans with serious presidential ambitions pay lip service to condemning large federal outlays but have yet to endorse or propose anything this drastic. Gov. Tim Pawlenty (R-MN), for instance, a fairly cautious and opportunistic presidential contender is not only not talking about leaving Medicaid, but he recently accept $263 million in federal dollars to bolster the state’s program. Perry, for his part, has yet to propose how Texas would efficiently cover the remaining beneficiaries in the Medicaid program.

A new McClatchy Newspapers-Marist poll released earlier this week only reiterates the argument that the mid-term elections were not a mandate to repeal health care reform — most Americans want to keep or expand expand the Affordable Care Act:

The post-election survey showed that 51 percent of registered voters want to keep the law or change it to do more, while 44 percent want to change it to do less or repeal it altogether.

Driving support for the law: Voters by margins of 2-1 or greater want to keep some of its best-known benefits, such as barring insurers from denying coverage for pre-existing conditions. One thing they don’t like: the mandate that everyone must buy insurance.

This is fairly significant because Republicans keep insisting that they will listen to the American people and act accordingly. I’m not aware of any major poll that shows a majority of Americans want to repeal the law after learning about its specific benefits and consumer protections. And since any real effort to rescind reform will require Republicans to get very specific about what they’re eliminating, it provides Democrats with another opportunity to tout the benefits of the measure. If anything, public support should only increase.

Rep. Gary Ackerman (D-NY) is now pursuing a version of that messaging strategy by tempting Republicans to sign-on to a series of bills repealing only the most popular provisions of Affordable Care Act. This is pure legislative gimmickry but it is also another creative way to expose the ridiculousness of repeal and build on the existing public support for maintaining reform.