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Take Action!

Tell Your Insurance Commissioner: Reform rules must protect consumers, not insurance companies!

In the Affordable Care Act, we won important reforms to curb premium cost growth and to stop the worst insurance company abuses. A key component of this is a new restriction on the share of premium dollars insurance companies can spend on their own profits, CEO salaries and administrative expenses. Beginning in 2011, each licensed health insurance company in the state must spend at least 80% of individual and small group insurance premium dollars on medical care and activities to improve health quality and at least 85% for large group health plans. These percentages represent the medical loss ratio (MLR). If an insurer doesn't meet these standards, it will owe rebates to its customers for the difference. The National Association of Insurance Commissioners (NAIC) is in charge of drafting a plan for HHS Secretary Sebelius to implement the MLR rules, including defining key terms and exceptions to the law.

(The link will open your email program. Please replace YOUR NAME and YOUR ADDRESS with your actual name and address so the commissioner can identify you as an Iowan.)

In the next few weeks, state insurance commissioners will make key decisions on how insurance companies spend your money. Insurance industry lobbyists are hard at work pressuring commissioners for loopholes and leniency in calculating these MLRs. Urge our insurance commissioner to stand with us, not the insurance industry.

Iowa's insurance commissioner, Susan Voss is the Vice Chair of the Executive Committee National Association of Insurance Commissioners (NAIC). It is critical she hear from Iowans. We need to get a firm commitment that Commissioner Voss will side with consumers and not weaken the recommendations that will be put forward to Secretary Sebelius.

Here are four key points to make to your insurance commissioner:

1. Keep the definition of quality activities narrow.
   • The law allows the cost of certain activities that improve health care quality to be included in the calculation of the MLR.
   • Currently the definition of quality improvement expenses is narrowly written and only allows health services that are evidence-based and objectively measurable. This can include activities such as disease management programs or programs that help avoid hospital readmissions.
   • Defining these quality improvement activities too broadly would weaken the MLR requirements, making it possible for insurers to meet them without actually improving health care quality for consumers.
   • Fraud prevention, network management, provider credentialing, and similar expenses are administrative activities every health insurer must do as a matter of course and should not count as quality improvement activities.
   • Insurance companies will look for every opportunity to shift administrative expenses into the quality improvement category of the MLR. Don't let insurers broaden the definition of quality activities to avoid paying customer rebates. Just because an activity is worthwhile does not mean it is a quality improvement expense.
2. Don't allow insurers to count costs of denying care as a "clinical expense."
   • Insurers claim their administrative costs for investigating, paying or denying your medical claims (so-called "loss adjustment expenses") are part of actual medical care and should count toward the MLR requirement.
   • This is not what the law says and not what Congress intended.
   • The expenses that count toward the MLR requirement should be real clinical care, not paperwork and denials of care.
3. Restrict transition periods and exceptions.
   • The law gives the Secretary discretion to create exceptions to the MLR standards if, for instance, a state's insurance market is fragile and the number of uninsured is likely to increase.
   • Some insurers have asked for broad exemptions from the MLRs required by the law.
   • Any exceptions should be as narrow as possible, for a limited time period, and done only to preserve consumer choice in the insurance market in the short-term.
   • Similarly, the statutory exception for a "small, different, and newer plan" should be strictly defined and rarely used.
   • Any exemptions or "transitions" to following the new law should be treated as a safety valve, not carte blanche to keep selling junk insurance.
4. Don't let insurance industry lobbyists drown out consumer voices.
   • Consumer group representatives were heard in the early NAIC workgroups and many of their recommendations were included during the initial stages of work.
   • Ultimately, insurance commissioners will vote on these important questions. When they do, will they be on the side of consumers or on the side of the insurance industry?

(The link will open your email program. Please replace YOUR NAME and YOUR ADDRESS with your actual name and address so the commissioner can identify you as an Iowan.)