(Becca Aaronson/Texas Tribune)
The U.S. Department of Health and Human Services has rejected the Texas Department of Insurance’s proposal to delay implementation of a federal health care reform provision aimed at curbing rising premiums.
Under the federal Affordable Care Act, starting in 2012, insurance companies are required to maintain a “medical loss ratio,” or MLR, of 80/20 for individual insurance plans and 85/15 for the employer-provided insurance market starting.
Put simply, that means insurance companies must devote 80 or 85 percent of premium dollars directly to health care services, and refund policyholders at the end of the year for spending on overhead costs above 20 or 15 percent. The intention of the provision is to pressure insurance providers to cut down on administrative, marketing and other non-health related operating costs in order to curb rising premiums.
(Read more at Texas Tribune)
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