Insurers Brace for Costly Changes from Healthcare Reform

Jeff Elliott, for HealthLeaders Media , January 19, 2011

Representatives at HHS beg to differ and convened a 17-member panel via the Institute of Medicine (IOM) flesh out coverage details. Fortunately for health plans, they will have a say in the final rules, albeit not a very big one. UnitedHealth Group has a representative and the founder of WellPoint, who is now an educator with the University of Southern California, will lend their perspectives. The rest of the panel includes lawyers, doctors from various specialties, consumer advocates, heads of health-related nonprofits, and even a private equity investor.

Though their ruling is not due until next fall, health plans are likely to be unsettled about the potential outcome. Unlike other recent decisions by HHS such as the medical loss ratio (MLR) in which many health plans were already within the mandatory administrative spending limits, this one has the potential to become quite costly. With tighter restrictions on premium increases laid out by HHS, it’s sure to affect insurers' profits.

I doubt the panel will go too far. To ensure their viability, insurers will have to charge their members for the relative amount it costs to provide coverage for the determined medical services. And if consumers are required to purchase this coverage … well it’s not hard to figure that compromise is necessary.

See also:

HHS: Repeal of Reform Threatens Those with Pre-Existing Conditions

Major Changes to Healthcare Reform Law Unlikely

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