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WellPoint, others may need relief from law's spending mandate

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The U.S. health overhaul’s mandate that insurers spend 80 percent of premiums on medical care may need to be loosened to keep companies from abandoning the market for people who buy coverage on their own, state regulators said.

Lowering the requirement in some states “may be desirable” at least until 2014, when other provisions in the health-care law will make it easier to find insurance, according to a draft report released Monday by the National Association of Insurance Commissioners. The group of state regulators is expected to send a final recommendation on the rules to U.S. officials by June 1.

The health law passed by Congress in March will force insurers, led by Indianapolis-based WellPoint Inc. and Aetna Inc. of Hartford, Conn., to give rebates to customers next year if companies don’t meet the medical-spending minimums. The commissioners’ draft report said the rule may be too strict for some individual policies, where marketing and administrative costs tend to be higher.

The disruption would depend on “the extent to which issuers would be unable or unwilling to meet the standards, and would therefore withdraw from the market and terminate existing policies,” the memo said. “In the worst case, this could lead to a lack of available coverage.”

Starting in 2014, insurance companies will be banned from denying customers based on their health, and states will open online “exchanges” to assist consumers in buying policies. Until those provisions begin to assist buyers, reducing the medical-cost requirement “in many states” may be the best solution, the report said.

The health-care legislation allows for the suspension of the 80 percent standard if it would destabilize the individual insurance market. The U.S. Department of Health and Human Services is expected to propose the final regulations later this year.

The memo, written by Rick Diamond, an actuary with the Maine Bureau of Insurance, said most insurers will meet the requirement for large- and small-group policies. Compliance will be easier because the law lets companies subtract state taxes on premiums while including as medical costs a range of “activities that improve health-care quality,” the memo said.
 

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  1. A Tilted Kilt at a water park themed hotel? Who planned that one? I guess the Dad's need something to do while the kids are on the water slides.

  2. Don't come down on the fair for offering drinks. This is a craft and certainly one that belongs in agriculture due to ingredients. And for those worrying about how much you can drink. I'm sure it's more to do with liability than anything else. They don't want people suing for being over served. If you want a buzz, do a little pre-drinking before you go.

  3. I don't drink but go into this "controlled area" so my friend can drink. They have their 3 drink limit and then I give my friend my 3 drink limit. How is the fair going to control this very likely situation????

  4. I feel the conditions of the alcohol sales are a bit heavy handed, but you need to realize this is the first year in quite some time that beer & wine will be sold at the fair. They're starting off slowly to get a gauge on how it will perform this year - I would assume if everything goes fine that they relax some of the limits in the next year or couple of years. That said, I think requiring the consumption of alcohol to only occur in the beer tent is a bit much. That is going to be an awkward situation for those with minors - "Honey, I'm getting a beer... Ok, sure go ahead... Alright see you in just a min- half an hour."

  5. This might be an effort on the part of the State Fair Board to manage the risk until they get a better feel for it. However, the blanket notion that alcohol should not be served at "family oriented" events is perhaps an oversimplification. and not too realistic. For 15 years, I was a volunteer at the Indianapolis Air Show, which was as family oriented an event as it gets. We sold beer donated by Monarch Beverage Company and served by licensed and trained employees of United Package Liquors who were unpaid volunteers. And where did that money go? To central Indiana children's charities, including Riley Hospital for Children! It's all about managing the risk.

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