KHN Morning Briefing

Summaries of health policy coverage from major news organizations

GAO Reviews Impact Of Health Law’s Medical-Loss Ratio Provision

Also in today's health policy headlines, the Wall Street Journal reports that a new state-federal program will put steep health premium increases under the microscope and the Washington Post showcases a map detailing state-by-state progress on creating health exchanges.

The Wall Street Journal: Steep Rises In Health Premiums Scrutinized
A new federal and state program on health-insurance rates will determine whether bad publicity alone is enough to stop insurers from levying steep increases. Starting Thursday, the Obama administration and states will automatically scrutinize any proposed health-premium increase of 10 percent or more as part of the 2010 health overhaul law. The change applies to an estimated 34.8 million insurance policies that Americans buy on their own or get through a small employer — two markets where consumers have faced particularly hefty increases in recent years (Adamy, 8/30).

Politico Pro: GAO: MLR Forcing Insurers To Cut Fees
Insurers are reducing broker commissions in order to comply with new medical loss ratio requirements, according to a Government Accountability Office study released Monday afternoon. "Almost all" of the seven insurers interviewed by the GAO said they were reducing broker commissions and adjusting premiums to meet health reform's 80 percent MLR requirement for the small-group and individual markets. The GAO report is sure to boost agents' and brokers' push for a bill pulling brokers' commissions from the MLR calculation for administrative expenses. And it undoubtedly would have sparked new discussion for the National Association of Insurance Commissioners if its summer meeting in Philadelphia hadn't been canceled because of Hurricane Irene (Millman, 8/29).

The Hill: GAO: New Rules Leading To Lower Health Care Premiums, Cuts To Agents' Fees
A controversial piece of the health care reform law is beginning to save consumers money but could also give them fewer plans to choose from, the Government Accountability Office (GAO) said Monday. The GAO interviewed insurance companies and regulators about the early impact of a provision that governs how insurance companies spend their money. It requires plans to spend 80 or 85 percent of their premiums on medical costs — a calculation known as the medical loss ratio (MLR). Companies that miss the minimum MLR will have to pay rebates to their customers (Baker, 8/29).

Modern Healthcare: Reform Seen Hitting Insurance Competition, Brokers
Both private insurance competition and insurance brokers are taking hits under the 2010 federal health care law, and those impacts are expected to increase, according to a Government Accountability Office report. An update on the implementation of the law's medical-loss ratio provisions found that some insurers were cutting back their business in some states because their low market share might lead them afoul of the law. For example, one large insurer that operates in multiple states told GAO auditors that the company exited the individual market in one state where they had a smaller market share, in part, because of the MLR requirements (Daly, 8/29).

The Washington Post: Health Reform Implementation In One Map
A few interesting things to note here: The map doesn't break down nicely on party lines. States that have passed exchange bills tend to lean Democratic, but it’s by no means a clear dichotomy.  Both Nevada and California passed exchange bills under Republican governors; Mississippi and Idaho have, over the past few weeks, become increasingly aggressive about setting up exchanges (Kliff, 8/29).

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