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NAIC Unanimously Approves MLR Recommendations

In approving its recommendations for medical loss ratios (MLRs) under the new healthcare law, the NAIC on October 21 unanimously backed tough rules requiring health...
October 27, 2010

In approving its recommendations for medical loss ratios (MLRs) under the new healthcare law, the NAIC on October 21 unanimously backed tough rules requiring health insurance companies to direct more of the premiums they collect to medical care, rather than corporate salaries and profits. In doing so, the NAIC rejected many of the insurance industry's requests. Insurers sought looser definitions of some spending, arguing changes were needed for them to stay competitive.

Under the law passed in March, large group health plans must allocate at least 85 cents per premium dollar to medical care, not administrative costs or profit. Plans for individuals or small groups must spend 80 cents per dollar. The NAIC was charged under the new law to make recommendations defining what constitutes medical spending, with the final decision being made by the Department of Health and Human Services (HHS).

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