Regulators miss deadline on medical loss ratios: Other implementation developments continue to emerge

Jun 3 2010

The Washington Post: Insurance regulators have missed an early deadline to set specific rules meant to ensure that insurers devote 80 to 85 percent of premium dollars to medical care, the so-called "medical loss ratio."

"A national assembly of state insurance regulators, which is helping the federal government translate the law into more specific rules, said it was unable to meet a Tuesday deadline for standards meant to ensure that consumers get value for their premium dollars." The rules are meant to limit the money spent on marketing, bonus pay and administration of plans. "Although the law set a Dec. 31 deadline for regulators to write standards governing the 'medical loss ratio,' or the percentage of premium revenue spent on medical care, Health and Human Services Secretary Kathleen Sebelius had asked the NAIC to get back to her by Tuesday. That would have given the insurance industry more time to adjust to the new requirements." In a June 1 letter to Sebelius, "NAIC leaders said they are still trying to determine how different types of expenses should be factored into the ratio. Insurers that fall short would have to pay rebates to customers" (Hilzenrath, 6/2).

In other health overhaul news, the Milwaukee Journal Sentinel reports that reform will give community health centers billions more over the next five years to double in size. "The health centers, often located in low-income urban neighborhoods and rural areas, are an overlooked component of the health care system. But they provide care to nearly 244,000 people statewide, up from 89,392 in 1999. That's roughly 80,000 people in Milwaukee, or about one in seven residents. … Reform legislation allocated an additional $11 billion for the community health centers over the next five years. To put that in perspective, the federal government now spends $2.2 billion a year on direct support for the centers" (Boulton, 6/2).

And Kaiser Health News provides more details on what the health law means for consumers. Among the questions answered are how people who don't have insurance will be affected, how insurance may be made more affordable for some and how the law will affect those with health problems. "If you have a medical condition, the law will make it easier for you to get coverage. Health insurers will be barred from rejecting applicants based on health status in 2014. Until the new exchanges are up and running in 2014, the law created temporary high-risk insurance pools for people with medical problems who have been uninsured at least six months. The new risk pools - which will be run by the states and the federal government - are scheduled to start accepting members in September" (Galewitz, 6/2).

Meanwhile, The Hill reports that Democrats have taken a Government Accountability Office report to their Memorial Day recesses at home to try to win seniors over on the new health law. "Democratic lawmakers are touting a new report to argue that healthcare reform will protect Medicare beneficiaries from unscrupulous insurers. A new Government Accountability Office (GAO) report finds that some Medicare Advantage plans may have bilked seniors by attracting healthy enrollees into low-premium plans and then hitting them with high and unexpected out-of-pocket costs — something health reform will prevent, Democrats say." The report comes as some are worried about the effect the law will have on Medicare Advantage plans. It says that seniors in low-premium plans paid more for inpatient hospitals stays and about $500 more for a typical stay in nursing homes. The insurance industry says that most seniors are extremely satisfied with their Medicare Advantage plans. An industry spokesman "highlighted the fact that seniors paid $823 in cost-sharing under Medicare Advantage for the average 10-day inpatient hospital stay, versus $1,068 under traditional Medicare" (Pecquet, 6/1). 

And the Austin American-Statesman's PolitiFact Texas fact checks a recent assertion by the chairwoman of the Republican Party in Texas that the health law will provide free Viagra to convicted rapists and sex offenders is "half true." The Congressional Research Service said "that an insurance plan through the health exchange must include basic coverage, including prescription drugs, and the law does 'not appear to prohibit ... coverage for drugs prescribed to treat (erectile dysfunction) for a non-incarcerated beneficiary who was previously convicted of rape, child molestation or another sex offense.' Nor, the memo states, would those individuals 'appear to be excluded from enrolling in a qualified health plan offered through an American Health Benefit Exchange in their state solely because of that conviction.'" But plans won't be finalized until 2014, the fact check reports and the drugs won't be free. The chairwoman "frames the prospect of free Viagra for sex offenders too simply" (Adams, 6/1).