WASHINGTON (CN) – The Office of Consumer Information and Insurance Oversight has implemented a set of requirements meant to bring down the cost of health care coverage and help ensure policyholders receive value for their premium dollars.
They are called medical loss ratio requirements for health insurance issuers under the Public Health Service Act, as added by the Patient Protection and Affordable Care Act.
Under the rules, health insurance issuers will provide rebates to enrollees when their spending for the benefit of policyholders on reimbursement for clinical services and quality improving activities, in relation to the premiums charged, is less than the medical loss ratio standards established pursuant to the statute. The rebate provisions also are designed to create incentives for issuers to operate more efficiently.
Health insurance issues are to “submit to the Secretary a report concerning the ratio of the incurred loss (or incurred claims) plus the loss adjustment expense (or change in contract reserves) to earned premiums.” The report is meant to allow enrollees of health plans, consumers, regulators, and others to take into consideration medical loss ratio s as a measure of health insurance performance.
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