January 25, 2011 - Insurance Commissioner Dave Jones today announced that the Office of Administrative Law (OAL) approved his request for an emergency regulation to give him the authority to enforce the 80% Medical Loss Ratio (MLR) in the individual market established under the Patient Protection and Affordable Care Act (PPACA) that went into effect on January 1, 2011. The MLR is defined as the percentage of premium revenues an insurer pays for medical services, as opposed to insurer profits, marketing, and overhead.
"The OAL's ruling to approve the emergency regulation I proposed on my first day in office is an important step in ensuring that consumers are getting the best deal possible for their premium dollars," Commissioner Jones said. "This emergency regulation will give me the legal authority to enforce the new federal 80% medical loss ratio for the individual health insurance market in California, even if Congress prevents the federal Department of Health and Human Services from enforcing it. I will be watching very closely to make sure health insurers comply."
Today's development represents the fulfillment of a commitment Commissioner Jones made at his inauguration when he signed a "Notice of Emergency Regulation" to begin this process. Under PPACA, as of January 1st, health insurers in the individual market are required to maintain a medical loss ratio of 80%.
To view the documents indicating OAL's approval and filing, please click here.