UPDATED: Defining a Medical Expense? Easier Said Than Done.

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News Article

Article:

May 11, 2010

In a detailed letter to HHS Secretary Sebelius and National Association of Insurance Commissioners President Jane Cline, Senator John Rockefeller, Chairman of the Senate Committee on Commerce, Science, and Transportation, warned that insurers have been reported to aggregate medical loss ratio data in such a way to make it easier to meet new minimum levels and to re-classify expenses as “medical” or “quality improving”. He urges regulations that mandate insurers demonstrate that quality improving expenditures are actually benefitting consumers.

The effectiveness of regulating medical loss ratios (MLR) or the percentage of each health insurance premium dollar spent on medical expenses as a means to help keep health insurance affordable will be determined in part by federal rulemaking to define exactly what is considered a “medical service”. The Patient Protection and Affordable Care Act requires that 80-85% of premiums be spent on medical services however, there is an ongoing debate about what constitutes a “medical service.” The Secretary of HHS has specifically sought input on this question from National Association of Insurance Commissioners (NAIC) but consumer views will also be considered.

Click here for Senator Rockefeller’s letter.

Click here for HHS’s letter to the National Association of Insurance Commissioners regarding pending MLR regulations.

Click here for the recent POLITICO story on the ongoing debate.

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