By Andrea Stone, AOL.com
Insurance companies will have to spend 80 to 85 percent of consumers’ premiums on direct patient care or send a rebate if they don’t, under long-awaited rules issued today that were passed as part of the Obama administration’s health care law.
The 308 pages of regulations on what is known as the “medical loss ratio” may be technical, but Health and Human Services Secretary Kathleen Sebelius called them “an important step to hold insurance companies accountable and increase value for consumers.”
The new regulations, which take effect in January and will require companies to issue annual reports to HHS, require companies to spend at least 80 percent of premiums delivering health care to consumers. In employer plans that cover more than 50 people, insurers would have to spend 85 cents of every premium dollar on medical care and efforts to improve health care quality.
Companies that fail to meet those guidelines will have to provide rebates to customers starting in 2012.
The rules were developed with the National Association of Insurance Commissioners, which represents state insurance regulators.
NotableM's Blog 