California's Office of Administrative Law has approved an emergency regulation by Insurance Commissioner Dave Jones (D) that authorizes him to enforce the medical-loss ratio requirements of the federal health care reform law, the Sacramento Bee reports.
Previously, California required insurers in the individual health insurance market to spend at least 70% of premium revenue from on medical care.
Starting Jan. 1, 2011, the federal reform law instituted a rule requiring individual health plans to spend at least 80% of premiums on medical care and quality improvement efforts. Insurers that fail to meet the new federal standard this year will be required to issue refunds to individual policyholders next year (Calvan, Sacramento Bee, 1/26).
During his inauguration earlier this month, Jones proposed the emergency regulation to allow him to begin enforcing the federal medical-loss ratio rule (Rauber, San Francisco Business Times, 1/25).
Enforcing the Requirements
According to Jones, the newly approved regulation authorizes him to enforce the 80% medical-loss ratio requirement in California's individual insurance market, even if Congress prevents HHS from enforcing the rule. Jones said, "I will be watching very closely to make sure health insurers comply" (Vesely, Modern Healthcare, 1/25).
Anthony Wright -- executive director of advocacy group Health Access California -- said Jones' regulation "doesn't change policy, but there's now a cop on the beat" (Sacramento Bee, 1/26).
For additional coverage of the new emergency regulation, see today's Capitol Desk post.