HHS Approves Medical Loss Ratio Rule

Source: Business Insurance

By Jerry Geisel

The Department of Health and Human Services (HHS) [last week] issued the first in what will be a series of guidance and rules to aid states in complying with a health care reform law requirement to set up insurance exchanges by 2014.

Under the law, the exchanges are to be open to individuals, such as those working for companies that do not offer coverage, and small employers [initially]. Coverage will be offered by commercial insurers, much like the exchange that was created by Massachusetts’ 2006 health care reform law.

In the initial guidance, HHS notes that states will have the option to establish exchanges as a governmental agency, either as part of an existing agency or through the creation of a new state agency. Alternatively, an exchange could be part an independent public authority, as is the case in Massachusetts.

The guidance also says exchanges could negotiate rates with insurers or could act as a “clearinghouse” that would be open to all qualified insurers.

The guidance is available at www.hhs.gov.


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