Sunday, December 4, 2011

Latest MLR update

Implementing Health Reform: Fine-Tuning The Medical Loss Ratio Rules from the HealthAffairs blog and 'HHS Unveils Insurance Rule: Brokers Do Not Count As 'Health Costs' from Kaiser Health News bring us the latest updates on the government's position on the MLR, the Medical Loss Ratio.

From HealthAffairs, a reminder of how the MLR figures in healthcare reform: "The MLR rule has been one of the most controversial provisions of the Affordable Care Act (ACA). The MLR provision of the Affordable Care Act (section 2718 of the Public Health Services Act) requires health insurers in the individual and small group market to spend 80 percent of their premiums, after subtracting taxes and regulatory fees (85 percent for large groups), on payment for medical services or on activities that improve health care quality. Insurers must report their medical loss ratios annually and insurers that fall short of the target must rebate to their enrollees an amount equal to the product of the difference between their actual medical ratio and the statutory target multiplied by their premium revenues"

Insurance agents and brokers had argued in favor of their commissions being excluded from 'administrative costs', but HHS rejected their argument. The latest changes also related to rebates and how they would be paid, tweaked what could be included in quality improvement expenses, and tweaked allowances for a couple of specific plans... Also, rebates to consumers will not be taxable income.

Some previous blog entries referencing the MLR:
The MLR saga continues - May 13th, 2011
Misc update (MLR) - Mar 26th, 2011
Misc update - V - Feb 13th, 2011
Misc updates - MLR - Oct 25th, 2010
MLR Redux - Aug 24th, 2010
MLR update - Jun 27th, 2010
Health care re-form VIII (More nonsense) - August 28th, 2009

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