The rule is the medical loss ratio (MLR). It is part of the Affordable Care Act and says health insurers have to spend 85% of premium dollar income on health care and not on profit or administrative expenses.
Now the Obama administration has taken that concept and applied it to health insurance companies managing Medicaid health insurance plans. Insurers are up in arms over the decision and are offering up the same arguments they presented when the MLRs were adopted for ObamaCare.
Dan Durham — who is the interim CEO of America’s Health Insurance Plans — said, “An arbitrary cap on health plans’ administrative costs could undermine many of the critical services — beyond medical care — that make a difference in improving health outcomes for beneficiaries, such as transportation to and from appointments, social services, and more.”
By the way, PIA opposed the MLR when the administration put it into effect and contends they have cost independent insurance agents millions in commissions.
Source link: The Hill