A key group of state insurance commissioners has backed recommendations dictating how U.S. health insurance companies should spend customers' premium dollars.
The National Association of Insurance Commissioners (NAIC) said in a statement that the group, which is charged with proposing the spending rules under the new healthcare law, passed "only technical amendments" to its proposals before sending them to U.S. health officials.
Such spending ratios, known as a medical-loss ratio or MLR, have been closely watched by Wall Street as a sign of potential profitability. But under the law, customers would see some of those extra funds in the form of a rebate.
Under the law passed in March, insurers' large groups' health plans must allocate at least 85 cents-per-premium dollar to medical care, not administrative costs or profit. Plans for individuals or small groups must spend 80 cents per dollar.
NAIC's definitions for what counts as medical spending and other recommendations now move to the U.S. Department of Health and Human Services, which will decide whether to adopt the proposals as regulation or first make changes. U.S. Health Secretary Kathleen Sebelius has said the agency would like to move on the regulations this month.
Insurers, which include companies such as Aetna Inc , Cigna Corp, Humana Inc, WellPoint Inc and UnitedHealth Group Inc, must implement the spending changes by Jan. 1. (Reporting by Susan Heavey; Editing by Maureen Bavdek)
© 2016 Thomson/Reuters. All rights reserved.