KHN Morning Briefing

Summaries of health policy coverage from major news organizations.

Cigna Lobbies To Define Medical Loss Ratio On Insurers’ Terms

Cigna has become a player in the insurance industry's lobbying on what should count as medical care under new rules governing health care spending, Kaiser Health News and McClatchy report. "The insurer has stayed in step with larger rivals such as Aetna and WellPoint in an often contentious dialogue with the National Association of Insurance Commissioners - a network of state regulators that's been charged with advising federal officials on implementing the health care law. Included in that work is defining medical loss ratio, which will determine what proportion of the health premiums collected by insurers is used for patient care and what is considered administrative expense. The new law mandates that insurers meet tight requirements" (Weintraub, 8/16).

A companion blog post from Kaiser Health News/NPR' Shots Blog explains: "Under the law, insurers are required to spend 80 percent of the money they collect in premiums from individuals and small businesses. For large employers, 85 percent of premiums are supposed to go to medical care. The magic number is known in the business as the medical loss ratio." The National Association of Insurance Commissioners is meeting now in Seattle to come up with a suggested policy for the requirement. Insurers that don't meet the requirement will have to pay out rebates to their policy holders (Verdon, 8/16).

Cigna's lobbying for the last quarter totaled $560,000, The Associated Press/Bloomberg Businessweek reports. That's "up from $260,000 in the same quarter last year, according to reports filed with the Clerk of the House of Representatives. The total also represented an increase from the $400,000 Cigna spent in the first quarter of this year." The insurer "focused on health care reform, Medicare prescription drug programs and other issues" (8/16).

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