Obama administration to discuss medical loss ratio during meeting with state insurance commissioners

President Obama will drop by an administration meeting with state insurance commissioners on Wednesday ahead of his comments on the six-month anniversary of healthcare reform. Topics under discussion will include health insurance rate review, the definition of what constitutes "unreasonable" rate increases and the medical loss ratio, senior administration officials said.

The medical loss ratio conversation could be especially important, one policy analyst notes, because the National Association of Insurance Commissioners subpanel tackling the issue is expected to release draft legislation by Monday. The NAIC is set to vote on the regulation next month following a public comment period.

The administration does not want to publicly override the commissioners, the analyst said, so it makes sense to iron out any differences before the commissioners send their product to the secretary of Health and Human Services for certification. Last month, the chairmen of the House and Senate committees of jurisdiction over healthcare said only that taxes pertaining to the healthcare reform law should be excluded when calculating the ratio; the NAIC is leaning in the direction of excluding many more taxes, which means health plans wouldn't have to spend as much on care to meet their medical loss ratio requirements under the new law.

But NAIC President Jane Cline tells The Hill that the administration has not weighed in on the tax piece of the ratio. Cline, the West Virginia insurance commissioner, added that she does not expect the White House to do so Wednesday.

Administration officials, she said, "have been very respectful of our work."

"They recognize that it's important that we get the medical loss ratio definitions to them as soon as possible so that they have the opportunity to put forward their regulations and the industry knows what is expected of them," she said.

Under the health reform law, large group plans must spend at least 85 percent of premium dollars on care; plans in the small group and individual market have an 80 percent requirement. The provision applies to plan years starting in 2011, with rebates to consumers beginning in 2012.