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NAIC Draft on Medical Loss Ratios Open for Comment

Janice Simmons, for HealthLeaders Media, September 28, 2010

Public comments can be made until Oct. 4 on the draft prepared by the National Association of Insurance Commissioners (NAIC) on medical loss ratios (MLRs). These are limits to be placed on health insurance plans beginning Jan. 1 that specify how many premium dollars may go toward medical care versus administrative costs and profits.

Some comments may include suggestions that the federal government include phasing in of the requirements in the states—specifically to avoid a sudden flight of insurers providing small market and individual coverage. The healthcare reform legislation passed six months ago calls for an MLR of 85% for insurers providing large group coverage and 80% for those providing coverage to the individual and small group health insurance market.

Concerns have been raised, though, on whether the insurers providing coverage to smaller group health markets would be able to meet the MLR requirements—due in part to higher overhead expenses and fees.

Last week, several state insurance commissioners, during a White House meeting with Obama administration members, emphasized that a phased-in approach could help avoid disruption in their states' insurance markets. Officials from Iowa and Maine specifically requested waivers to gradually phase in the MLR rules through 2014.

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