State insurance regulators approve guidelines for health plans' spending

The National Association of Insurance Commissioners voted unanimously Tuesday to approve a guideline for what insurers can count as medical costs - as opposed to administrative expenses - under new health law rules, Politico reports. The health law requires large group insurance plans to spend at least 85 percent of premiums on medical expenses. Small group plans must spend 80 percent. The NAIC, in their proposal, "approved amendments that narrow inclusions of utilization review in the calculation and expand the definition of 'wellness and health promotion activities' to include 'public health marketing campaigns that are performed in conjunction with state or local health departments.'" Despite the unanimous vote, "familiar fault lines emerged between consumer advocates and industry over the document and how it categorizes medical spending" (Kliff, 8/17).

The Hill: "The health insurance industry on Tuesday criticized state regulators for adopting a narrow category for what health plans can count as medical care and quality improvements when calculating their medical loss ratios. Barring health plans from counting fraud prevention and other investments, insurers say, hamstrings their ability to keep costs down." America's Health Insurance Plans President and CEO Karen Ignagni said that "the current proposal could have the unintended consequence of turning-back-the-clock on efforts to improve patient safety, enhance the quality of care, and fight fraud" (Pecquet, 8/17).

Insurance News Net: The NAIC's proposal includes the "blanks" - actual forms insurance companies will use to submit required financial information to regulators. "The form's approval represents the culmination of months of work by the Health Reform Solvency Impact Subgroup through meetings, conference calls and public comment periods. ... The Blanks form is just one of many efforts being executed by the NAIC to meet the requirements of the health care law. State regulators and NAIC staff continue to work diligently to execute these efforts in a thorough and transparent manner" (8/18).

Modern Healthcare: "Regulations on this medical-loss ratio provision are expected this fall from HHS. NAIC is providing guidance on the issue, and so the blanks document has been eagerly awaited by insurers and consumer groups. HHS still must certify the blanks document. NAIC is still putting the details into the final blanks document and will release it on Wednesday, a spokesman said" (Vesely, 8/17).