Health System Reform Insight - April 22, 2011
Given the new direction for the nation's health system, the AMA has developed Health System Reform Insight to help you understand the Affordable Care Act and what it means to you and your patients.
Editor's note: This edition begins a two-part series on issues that involve state insurance commissioners and the National Association of Insurance Commissioners—and the AMA's advocacy on those issues.
Even though the Affordable Care Act (ACA) is federal law, it includes numerous opportunities for state input and flexibility as it is implemented. While state officials in both the executive and legislative branches are very involved in implementing the ACA, state insurance commissioners have taken the lead on many key projects.
The National Association of Insurance Commissioners (NAIC) has been instrumental in facilitating policy discussions among insurance commissioners and drafting recommendations for use by both federal and state-level policy-makers. The AMA has been representing physician and patient interests before the NAIC on several aspects of the ACA, including the law's medical-loss ratio provisions.
The ACA requires that health insurers provide patients with actual value for the premiums they spend for insurance. With that, every health insurer must meet a medical-loss ratio to ensure affordable premiums and consumer value. Large group health insurers must spend at least 85 percent of premiums on direct medical care, while small and individual group insurers must spend at least 80 percent of premiums on direct medical care.
If an insurer exceeds its ratio, it must provide the consumer with a rebate for the amount in excess of the ratio percentage. The law recognizes that there may be special circumstances for smaller, different or newer plans.
In addition to this requirement, the ACA requires the secretary of the U.S. Department of Health and Human Services (HHS) to establish a uniform definition of medical-loss ratio and a methodology for determining loss-ratio calculations. The ACA specifically delegates to the NAIC the authority to develop recommendations for implementation and definitions of the medical-loss ratio requirements.
In response, the NAIC began drafting recommendations for the medical-loss ratio actuarial "blanks form" and draft regulation in April 2010. Its executive committee passed final language in October 2010.
The AMA advocated for draft regulations that required insurers to spend enrollee premium dollars accurately and transparently. AMA advocacy included submission of many comment letters to both the NAIC and HHS Secretary Kathleen Sebelius, active participation in more than a year of conference calls and meetings, and many hours of direct lobbying and coalition building.
In November 2010, HHS published an interim final rule that adopted the NAIC recommendations in full. The AMA sent a comment letter to HHS in support of the interim final rule on Jan. 31 and continues its advocacy for a strong medical-loss ratio.
Representatives for the agents and brokers have been strongly advocating for exclusion of their fees and commissions from the "administrative expenses" portion of the medical-loss ratio. The AMA strongly opposes this exclusion because it will diminish the premium dollars available for direct medical care.
Read a blog post from AMA President Cecil B. Wilson, MD, about the ACA's medical-loss ratio provisions.
Part 2 on May 5: Work on health insurance exchanges and the process for rate reviews.
June 6
Comments are due on proposed rules covering the Centers for Medicare & Medicaid Services' accountable care organization program.
AMA webinar on proposed regulations for the Medicare accountable care organization program
Letter from AMA, 100 medical and physician organizations in support of HEALTH Act
Advocating for improvements to the Affordable Care Act
Medicare physician payment rates for 2011
AMA comments on ACA implementation regulations
Investments in disease prevention and wellness initiatives under the Affordable Care Act
New HHS Web portal to help consumers buy health insurance
Pathways for physician success under health care payment and delivery
reforms
