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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. These liberals are out of control. They want to drive our economy into the ground and double and triple our electric bills. Sierra Club, stay out of Indy!

  2. These activist liberal judges have gotten out of control. Thankfully we have a sensible supreme court that overturns their absurd rulings!

  3. Maybe they shouldn't be throwing money at the IRL or whatever they call it now. Probably should save that money for actual operations.

  4. For you central Indiana folks that don't know what a good pizza is, Aurelio's will take care of that. There are some good pizza places in central Indiana but nothing like this!!!

  5. I am troubled with this whole string of comments as I am not sure anyone pointed out that many of the "high paying" positions have been eliminated identified by asterisks as of fiscal year 2012. That indicates to me that the hospitals are making responsible yet difficult decisions and eliminating heavy paying positions. To make this more problematic, we have created a society of "entitlement" where individuals believe they should receive free services at no cost to them. I have yet to get a house repair done at no cost nor have I taken my car that is out of warranty for repair for free repair expecting the government to pay for it even though it is the second largest investment one makes in their life besides purchasing a home. Yet, we continue to hear verbal and aggressive abuse from the consumer who expects free services and have to reward them as a result of HCAHPS surveys which we have no influence over as it is 3rd party required by CMS. Peel the onion and get to the root of the problem...you will find that society has created the problem and our current political landscape and not the people who were fortunate to lead healthcare in the right direction before becoming distorted. As a side note, I had a friend sit in an ED in Canada for nearly two days prior to being evaluated and then finally...3 months later got a CT of the head. You pay for what you get...

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