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View Diary: VIDEO - Arlen Specter says NO on MTP to public health plan option (303 comments)

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  •  S. 391 loss ratio (0+ / 0-)

    Private Insurance Company Loss Ratio-

    (1) IN GENERAL- The Secretary, in consultation with consumer and patient organizations, the National Association of Insurance Commissioners, and health insurance issuers (including health maintenance organizations) shall establish a loss ratio for issuers of HAPI plans.

    (2) DETERMINATION OF LOSS RATIO- In determining the loss ratio, administrative costs shall be defined as expenses consisting of all actual, allowable, allocable, and reasonable expenses incurred in the adjudication of subscriber benefit claims or incurred in the health insurance issuer's overall operation of the business.

    (3) ADMINISTRATIVE EXPENSES- Unless otherwise determined by an agreement between a State HHA and a health insurance issuer, the administrative expenses of an issuer shall--

    (A) include all taxes (excluding premium taxes) reinsurance premiums, medical and dental consultants used in the adjudication process, concurrent or managed care review when not billed by a health care provider and other forms of utilization review, the cost of maintaining eligibility files, legal expenses incurred in the litigation of benefit payments, and bank charges for letters of credit; and

    (B) not include the cost of personnel, equipment, and facilities directly used in the delivery of health care services (benefit costs), payments to HHAs for establishment and administration of HHAs, and the cost of overseeing chronic disease management programs and wellness programs.

    Note that the loss ratio (a simple number) is not establish by Congress.

    Note that a lower bound of the loss ratio isn't set by Congress. One person gets to decide how profitable insurers will be.

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