New regulations released for health insurers

Health insurers have to spend 85% of the money collected in premiums on medical care, not profit and administrative costs such as marketing, according to regulations released by the Department of Health and Human Services.

Health insurers, such as Aetna and WellPoint, have to spend 85% of the money collected in premiums on medical care, not profit and administrative costs such as marketing, according to regulations released by the Department of Health and Human Services. 

America's Health Insurance Plans (AHIP), the industry's trade group, had advocated for more company costs to be included as medical expenses, but Dow Jones reported that AHIP said "these regulations acknowledge the potential for individual insurance market disruption and take a first step toward minimizing such disruptions."

Before the regulation goes into effect on January 1, there had been no requirement for how much health insurers are expected to spend on premiums. The regulations stem from the passage of the healthcare reform legislation in March.

Insurance companies will be expected to report total earned premiums, total reimbursement for clinical services, total spending on activities to improve quality, and total spending on non-claims costs (excluding federal and state taxes and fees), according to healthcare.gov.

Yet The Washington Post writes: "... many intricate questions hover beneath the surface. The most central: Exactly which activities carried out by health plans deserve to be defined as improving the quality of patients' health?"

What do you think? Do patient education and outreach improve quality of care? Does this create an opportunity for PR practitioners versed in patient communications?

Have you registered with us yet?

Register now to enjoy more articles and free email bulletins

Register
Already registered?
Sign in