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Regulator gives insurers good news

Wall Street Journal, April 28, 2010

A first look at how a key provision in the federal health overhaul could be implemented suggests that insurers' profits won't take the hit that the industry had feared, the Wall Street Journal reports. At issue is the medical-loss ratio, or MLR, which under the new law requires insurers in the large-group market to spend 85% of the premiums they collect on medical expenses, as opposed to administrative expenses and profit-taking. Rick Diamond, a Maine actuary tasked with helping the National Association of Insurance Commissioners define MLR, wrote in a draft document posted on the commission's Web site that most insurers can meet the loss-ratio requirements of the new law.