NAIC MAKING STEADY PROGRESS ON MLR CALCULATIONS, DEFINITIONS

State Regulators Give HHS Progress Report, Set Timetable for Completion

WASHINGTON, D.C. (June 1, 2010) - The National Association of Insurance Commissioners (NAIC) submitted a letter today to the U.S. Department of Health and Human Services (HHS) detailing its progress in developing the rules for Medical Loss Ratios (MLR) under the Patient Protection and Affordable Care Act (PPACA). The letter responds to an HHS request to move the original Dec. 31, 2010 date for the rules to June 1, nearly seven months sooner than required by the PPACA.

"The NAIC has received tremendous input from dozens of consumer groups, regulators, health care organizations and industry trade groups," said Jane L. Cline, NAIC President and West Virginia Insurance Commissioner. "This complex issue will have a profound impact on the future of health care in this country and requires work in a thorough and conscientious manner. This issue is a top priority for the NAIC and we are proud of the progress made and reported to HHS today. However, the stakes are too high for this effort to be rushed or incomplete and we will provide our final recommendations to HHS later this summer."

The PPACA requires insurers to meet minimum medical loss ratios - the percentage of premiums collected by insurers actually spent on care that is not administrative costs or profits.

The law requires that the NAIC provide rules to HHS for the method of calculating these costs by Dec. 31, 2010. However, because that provision of the law takes effect for 2011, those calculations will need to in place by the end of this year for regulators and the industry to ensure their compliance.

When completed, the NAIC's decisions will determine how expenses paid by insurers, such as technology costs, wellness services, taxes and administration costs will affect the new requirements. Companies that do not pay the required proportion of collected premiums back to consumers in the form of claims paid and benefits provided must supply rebates.

Click HERE to view full text of letter to HHS.
Click HERE to view full text of letter to HHS on MLR (5/13/2010).
Click HERE for SPECIAL SECTION: Health Care Reform.

 

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