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Panel says most health insurers need to boost medical outlays

Wall Street Journal Health Blog, April 16, 2010

Most of the big publicly traded insurance companies spend less on medical care than the new health law will require of them, according to a report issued by the Senate Commerce Committee. The committee has spent almost a year digesting data on each insurer's medical-loss ratio, a metric watched by state regulators and Wall Street of how much health plans spend on benefits versus administrative expenses and profits, the Wall Street Journal Health Blog reports. Starting next year under the new health law, insurance companies will need to spend 80% of premiums collected from individual and small-group plans on medical care and 85% of premiums from plans sold to large groups on care.