CMS Issues Final MLR Regulation, Rejects NAIC’s Proposed Changes
By Jeff Jeffrey | |
A.M. Best Company, Inc. |
The
Under the ACA, health insurers in the individual and small group market are required to devote 80% of their premiums to covering medical costs. In the large group market, the requirement is 85%. The law also requires insurance carriers to provide rebates to policyholders starting in 2012, for premiums paid in the previous year, if those standards are not met.
In a
"Under the Affordable Care Act, consumers are already seeing better value from their health insurance companies," Tavenner said in a statement. "If your insurance company doesn't spend enough of your premium dollars on medical care or quality improvement this year, they'll have to give you rebates next year. This will bring costs down and give insurance companies the incentive to focus on what matters for patients -- high-quality health care."
The final version of the regulation includes several modifications to previous drafts of the rule. Among those are measures that make any MLR rebates tax free; require insurers to provide information about their MLR and how it has improved under the ACA, regardless of whether they are providing a rebate; and change how adjustments are calculated for mini-med plans, which are set to be prohibited in 2014.
The new regulation, which does not take into account any of the proposed changes put forward by the NAIC resolution, was met with criticism by the
"The Big 'I' is extremely disappointed in the final rule issued by HHS today on medical loss ratios," said
Symington said his organization will continue to support legislation that would exempt agent and broker commissions from the MLR calculation.
The NAIC's
Despite its support by some industry trade organizations, including the IIABA, the NAIC's resolution was not supported by all insurance commissioners. In fact, the resolution passed by a narrow 26-20 vote, with five commissioners abstaining.
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