Sebelius: Insurance org has 'reasonable' medical loss ratio

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Department of Health and Human Services (HHS) Secretary Kathleen Sebelius said Oct. 20 the National Association of Insurance Commissioners' (NAIC) recommendations to HHS on medical loss ratio were “achievable for insurers” and would help keep premiums lower.

“We thank the NAIC for the recommendations, which the commissioners finalized today on how best to implement the medical loss ratio policy, which will ensure consumers get the best value for their health care,” Sebelius said in a statement. “We recognize that these recommendations are the result of many months of hard work by the commissioners and their staff and we commend them for their open process and their responsible, thoughtful work.

“These recommendations are reasonable, achievable for insurers, and will help to ensure insurance premiums are, for the most part, supporting health benefits for consumers. Not only do they ensure consumers receive better value for their health care dollar, they recognize special circumstances in different markets to preserve market stability and employee coverage as we transition to the new marketplace in 2014,” she said.

“The next step is for the HHS to issue a medical loss ratio regulation that will provide clear guidance to stakeholders in the coming weeks.

“We will work quickly to promulgate this regulation, using the NAIC recommendations as a basis, because we believe these new policies will help ensure not only cost savings but higher quality care for consumers. We look forward to working closely with NAIC throughout the process.”

The NAIC approved the model regulation containing the definitions and methodologies for calculating medical loss ratios during a joint session of NAIC’s Executive and Plenary Committees at the group’s Fall National Meeting in Orlando, Fla., earlier this week. The approved model was then forwarded to HHS for certification, according to NAIC.

In preparation for the model’s submission to HHS, on Wednesday, the group sent a letter to Sebelius outlining several factors that will need to be addressed as the final guidelines are implemented, stated the group.

The issues included:

  • Solvency and competitive markets;
  • Phase-in of medical loss ratio limits;
  • Methods of rebate payment; and
  • Application of the MLR to expatriate policies.