WASHINGTON BUREAU — Sen. Al Franken is asking the U.S. Department of Health and Human Services (HHS) to review state requests for minimum medical loss ratio (MLR) waivers carefully before granting waivers.
Franken, D-Minn., has made the request for careful MLR reviews in a letter to U.S. Health and Human Services Secretary Kathleen Sebelius.
“Weak MLR requirements will allow insurance companies to continue to spend exorbitant portions of the dollars they receive in premiums on administrative costs, marketing, and CEO profits, rather than health care services and rebates for consumers,” Franken says in the letter.
The minimum MLR provision in the Patient Protection and Affordable Care Act of 2010 (PPACA) requires health insurers to spend 85% of large group revenue and 80% of individual and small group revenue on health care and quality improvement efforts. Insurers that fall short are supposed to send customers rebates.
HHS officials have given MLR rule waivers to at least three states and are reviewing applications from other states.
Recent reports and testimonials confirm that the minimum MLR provision is already helping to moderate the rising cost of premiums, Franken says in the letter.
Franken cites a report compiled by a working group at the National Association of Insurance Commissioners (NAIC), Kansas City, Mo.
The report shows that, if the MLR law’s rebate provisions had been in effect in 2010, American consumers would have received a total of $2 billion in health insurance rebates, Franken says.