Insurers, Advocates Fight Over Upcoming Spending Rules
Reuters: Insurance companies are banding together to weaken a key health law rule that requires them to spend as much as 85 percent of their revenues on medical care, according to the advocacy group Health Care for America Now. At issue is the definition of 'medical loss ratio,' the percentage of money spent by insurers on medical care, "rather than salaries, overhead and other administrative expenses."
"The insurance companies want to change the definition of medical care to include things that aren't medical, and to include things that never were considered to be medical," an HCAN official said. "The insurance industry, however, said the rules must be flexible enough so they can still invest in wellness initiatives and other programs that might not count as medical costs" (Lentz, 7/22).
Modern Healthcare: "This medical-loss-ratio provision is designed to prevent insurers from overspending on administrative costs such as marketing, salaries, underwriting, claims processing and overhead." But "[w]hether the law's intent is ultimately respected, however, 'depends on how state and federal regulators define which expenditures should be classified as legitimate medical costs,' according to the report [by HCAN]" (Lubell, 7/22).
MinnPost: "Sen. Al Franken warned today against weakening newly passed health-care reform regulations that aim to steer more health insurance dollars to actual medical costs." Franken authored the amendment creating the requirement that insurers "spend at least 85 percent of premiums in large group plans and 80 percent of premiums in small group or individual plans on actual health care costs (with the rest able to go to things like administrative costs, advertising and profits)" (Knobbe, 7/22).
The Hill: "Robert Zirkelbach, a spokesman for America's Health Insurance Plans, called the report 'a desperate attempt to distract attention away from the fact that these regulations could put at risk important services and benefits that improve the quality of care for millions of patients'" (Pecquet, 7/22).