FOR IMMEDIATE RELEASE

NAIC ANSWERS RATE REVIEW, MEDICAL LOSS RATIO QUESTIONS
Regulators Meet First of Two Deadlines Set to Guide HHS Treatment of Rates Under New Health Care Law

WASHINGTON, D.C. (May 14, 2010) — The National Association of Insurance Commissioners (NAIC) submitted letters to the U.S. Department of Health and Human Services (HHS) on two critical issues under the new health care bill. The letters provide answers to questions published in the Federal Register on April 14, 2010 about medical loss ratios and rate review.

The Patient Protection and Affordable Care Act (PPACA), signed into law on March 23, 2010, includes provisions designed to control costs through a rate review and approval standard for health insurance rates. In addition, the law requires insurers to meet minimum medical loss ratios – the percentage of premiums collected by insurers actually spent on care that is not administrative costs or profits.

"These documents demonstrate how the process of implementing new PPACA provisions can be informed by our experiences at the state level," said Jane L. Cline, NAIC President and West Virginia Insurance Commissioner. "This is an important step as we finalize our recommendations to HHS on how to design the processes for rate review and medical loss ratio required by health care reform."

The NAIC will now focus its attention on recommendations to HHS for the definitions and calculations that make up the final medical loss ratio formula when that provision takes effect in 2011. The NAIC will complete the formulation of these recommendations and submit them to HHS by June 1, 2010.

Click HERE to view full text of letter to HHS addressing rate review questions.

Click HERE to view full text of letter to HHS addressing medical loss ratio questions.

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About the NAIC

Formed in 1871, the National Association of Insurance Commissioners (NAIC) is a voluntary organization of the chief insurance regulatory officials of the 50 states, the District of Columbia and five U.S. territories. The NAIC has three offices: Executive Office, Washington, D.C.; Central Office, Kansas City, Mo.; and Securities Valuation Office, New York City. The NAIC serves the needs of consumers and the industry, with an overriding objective of supporting state insurance regulators as they protect consumers and maintain the financial stability of the insurance marketplace. For more information, visit www.naic.org.

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