FireDogLake: Medical Loss Ratio Requirements Working Where Applicable

The Government Accountability Office gave a fairly glowing report about the efect of the federal medical loss ratio, a policy inserted into the Affordable Care Act by Sen. Al Franken (D-MN) that forces insurance companies to spend 80-85% of their premiums (depending on the type of coverage) on medical treatment, and to rebate customers if they fall short of that ratio. After rulewriting, the MLR in place includes expenses for activities that improve health care quality as treatment, and excludes federal and state taxes and licensing fees paid by insurance companies from the total pot of premiums. Even then, insurance companies interviewed by GAO were eliminating some of the middleman waste in the system to get under the ratio, premium money that wasn't doing anything for real people. Insurers are also lowering premiums as a result. And for the most part, the MLR wasn't stopping insurance companies from doing business. (The PPACA refers to the Patient Protection and Affordable Care Act in the below excerpt.)

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© Al Franken - U.S. Senator, Minnesota, 2011. |
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