NAIC will set medical-loss ratios by mid-August

Officials with the National Association of Insurance Commissioners (NAIC) last week said that they may be able to complete guidelines to define administrative and medical spending under medical-loss ratio (MLR) rules by mid-August. Under the overhaul bill, large health plans will be required to spend at least 85% of premiums on medical services and quality improvement, rather than administrative costs or profits,beginning on Jan. 1, 2011.  MLR for individual and small-group health plans must be at least 80%. Although the new law requires the recommendations to be made by year's end, federal health officials had urged the group to submit the draft guidelines by the end of May to give insurance companies ample time to adjust to the new regulations.
Earlier this week, Sen. John Rockefeller (D-WV) sent a letter to NAIC urging the group to resist lobbying efforts by insurers to ease the MLR standards. Following this letter, Sen. Al Franken (D-MN) and Rep. Bill Pascrell (D-NJ) held an event Thursday with "Health Care for America Now" to highlight the liberal group's report on industry lobbying efforts to influence medical loss ratio provisions in the health care reform overhaul law.