Insurers' concerns with medical loss ratio outlined

Healthcare plans are raising several concerns with draft medical loss ratio regulations released Thursday, reports The Wall Street Journal.

The healthcare reform law requires small-group and individual market plans to spend at least 80 percent of premiums on medical care (85 percent in the large-group market) or offer customers rebates. The requirement begins in 2011, with rebates starting in 2012.

While insurers are satisfied that the draft allows them to deduct most taxes when calculating the ratio — congressional Democrats are pushing for a more restrictive definition — the plans have several concerns.

The industry had been pushing for an aggregated ratio reflecting all of a company's business units — some with high ratios, others with lower ones — the Journal reports; instead, the National Association of Insurance Commissioners' draft requires insurers to account for the ratios separately for every business unit in every state.

The draft also bars health plans from counting measures to combat fraud and review medical use as medical expenses. Spending on some non-medical costs, such as wellness activities, can be counted as medical expenses, however.

The NAIC is accepting comments on the regulations until Oct. 4 and hopes to adopt the regulation at its fall meeting later that month.