Writing New Rules for Insurers — Progress on the Medical Loss Ratio

Abstract

Few undertakings in the short history of the implementation of health care reform have been as difficult or contentious as the drafting of regulations to define the statute's “medical loss ratio” requirement. Beginning in 2011, health insurers must report annually the percentage of their premium revenue (excluding expenditures for taxes and regulatory fees) that they spend on “reimbursement for clinical services” and on “activities that improve health care quality.” This is their medical loss ratio. If the medical loss ratio of an insurer in the individual or small-group market falls below 80% (or, for large-group insurers, 85%), the insurer must . . .