The National Association of Insurance Commissioners announced Thursday it has voted to adopt a model regulation containing the definitions and methodologies for calculating medical loss ratios as required by health reform.
The vote by the association's Executive and Plenary Committees is a final move before the MLR model is passed onto Health and Human Services Secretary Kathleen Sebelius for certification.
"I commend the work of our regulators and staff as we considered a number of very challenging issues as it moved through the committee process. The committee model regulation on MLR passed with only technical amendments, which is a testament to our inclusive and transparent process," said Jane L. Cline, NAIC president and West Virginia insurance commissioner, in a statement. "It is with a great deal of pride we present these recommendations to the Secretary."
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As the NAIC neared completion of MLR regulations, the association sent a letter to Secretary Sebelius, outlining several issues that have come up in the process to move regulations forward.
According to Kaiser Health News, three contentious last-minute amendments failed to pass. One would have allowed insurers to deduct broker commissions, another would have allowed them to average their medical spending nationwide, rather than state-by-state, and the third would have loosened a complex "credibility adjustment" formula to allow many insurers, particularly smaller ones, to hit the medical spending targets, even if they don't spend 80 percent on medical care.
Through the enactment of PPACA, Congress and the Obama administration acknowledged the important consumer protections maintained by state insurance regulators. The law tasks the NAIC with a number of additional provisions to consider, including rate review and consumer information. The Health Insurance and Managed Care Exchanges subgroup has already begun work on their recommendations to HHS. They have been tasked with creating guidelines and recommendations to facilitate the implementation of health exchanges, due to be operational in the states by January 2014.
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