NAIC Approves Medical Loss Ratio Template

The National Association of Insurance Commissioners' Executive Committee unanimously approved the "blanks" template this week at its annual meeting in Seattle. The template, now available online, provides insight into what can be considered a medical expense under the minimum medical-loss ratio requirements.

The blanks, which are the forms submitted by insurers to state regulators when reporting financial information, will be used by the states in reviewing data and calculating medical-loss ratios. Under the new healthcare reform law, insurers with large group coverage plans are required to spend at least 85% of premiums on medical costs, and at least 80% of premiums for those plans with individual and small group plans starting in 2011. If any of the insurers fall short, they will be required to give customers a rebate for the difference starting in 2012.

The instructions, though, still might change depending on the definition of medical-loss ratio that the NAIC eventually approves this fall and forwards to the Department of Health and Human Services. HHS is responsible for certifying that language.

One major question slowing the deliberation is what is considered quality-related care—with consideration to such areas as nurses' hotlines, disease management programs, or public health education initiatives—and if and how that should be considered medical care under the ratio formula.

It already has caused concern in Congress. Earlier this month, more than four dozen senators and congressmen signed a letter sent to NAIC that asked it to "consider the strictest definition of 'quality improvement expenses' when implementing the mandatory medical-loss ratio standards."