HHS Unveils Medical Loss Ratio Regulations

John Commins, November 23, 2010

This story was updated on November 23.

New medical loss ratio regulations issued Monday will require health insurers in 2011 to spend between 80% - 85% of consumers' premiums on direct care for patients and care quality improvements, the Department of Health and Human Services has announced.

The new rules will affect about 74.8 million insured Americans. In 2012, up to 9 million Americans could be eligible for rebates totaling up to $1.4 billion -- or $164 per person in the individual coverage market if insurers don't meet the medical loss ratio, HHS said.

HHS Secretary Kathleen Sebelius said the medical loss ratio provision of the Affordable Care Act will make the insurance market more transparent and easier for consumers to purchase plans at a better value. "These new rules are an important step to hold insurance companies accountable and increase value for consumers," she said.

The medical loss ratio regulation outlines disclosure and reporting requirements, how insurance companies will calculate their medical loss ratio and provide rebates, and how adjustments could be made to the medical loss ratio standard to guard against market destabilization.

"These rules were carefully developed through a transparent and fair process with significant input from the public, the states, and other key stakeholders," said Jay Angoff, director of the Office of Consumer Information and Insurance Oversight at HHS. "As we build a bridge to 2014 when better, more affordable options are available to consumers these rules will help make health insurance fairer for consumers now."

John Commins

John Commins is a senior editor at HealthLeaders Media.

Facebook icon
LinkedIn icon
Twitter icon