HHS Unveils Medical Loss Ratio Regulations

John Commins, for HealthLeaders Media , November 23, 2010

The Affordable Care Act required the National Association of Insurance Commissioners to develop uniform definitions and methodologies for calculating insurance companies' medical loss ratios. The regulation issued today certifies and adopts the NAIC recommendations submitted to the Secretary of HHS on Oct. 27.

In a statement released Monday, America's Health Insurance Plans (AHIP) President and CEO Karen Ignagni said, "These regulations acknowledge the potential for individual insurance market disruption and take a first step toward minimizing such disruptions. The potential for disruption to employer-provided coverage should also be acknowledged and addressed. In addition, more consideration needs to be given to the cost of federally mandated investments in modernizing claims coding and the value of health plans' programs to prevent fraud."

Cecil B. Wilson, MD, President of the American Medical Association said in a statement, "We are pleased that HHS did not allow the health insurance industry to claim administrative expenses as medical losses, artificially inflate the medical loss ratio, or calculate their ratios at the national level."

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