Under the heading “Ensuring value and lower premiums,” the House healthcare reform bill would mandate that health plans have a minimum medical cost ratio of 85%, but the requirement would be eliminated after establishment of an insurance exchange.
Each health insurance issuer that offers health insurance coverage in the small or large group market shall provide that for any plan year in which the coverage has a medical loss ratio below a level specified by the Secretary (but not less than 85 percent)…The Secretary shall establish a uniform definition of medical loss ratio and methodology for determining how to calculate it based on the average medical loss ratio in a health insurance issuer’s book of business for the small and large group market. Such methodology shall be designed to take into account the special circumstances of smaller plans, different types of plans, and newer plans.
Under the heading “Sunshine on price gouging” any premium increases by health insurers would have to be justified to federal and state regulators.
The Secretary of Health and Human Services, in conjunction with States, shall establish a process for the annual review of increases in premiums for health insurance coverage. Such process shall require health insurance issuers to submit a justification for any premium increases prior to implementation of the increase.
(Hat tip Justin Lake of UBS).
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