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By Lukas Pleva July 1, 2010

Health bill requires insurers to pay minimums to patient care

It's been nearly half a year since we rated President Barack Obama's campaign pledge to "force insurers to pay out a reasonable share of their premiums for patient care." At the time, Congress was considering health care reform bills that included varying versions of the proposal, so we rated the promise In the Works.

Obama signed the health care bill on March 23, 2010, so we wanted to see if the provision made it into law.

Section 2718 calls on insurance providers to submit annual reports on what share of their premium revenue goes toward medical claims, "activities that improve health care quality," and all other "non-claims costs." The report must include an explanation of these costs, and is to be published on the website of the Department of Health and Human Services starting in 2010.

Under the law, providers are required to spend 80 percent of the premium on clinical services for the small group and individual market, and 85 percent for the large group market. Should they fail to do so, they must give customers a rebate, effective Jan. 1, 2011.

The new health care law mandates that insurance providers publish data on the percentage of premium revenue is spent on medical care and establishes minimum requirements. We rate this Promise Kept.

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Angie Drobnic Holan
By Angie Drobnic Holan December 4, 2009

House health reform bill requires pay out

During the campaign, Barack Obama promised to establish new requirements to force health insurance companies to spend a "reasonable" share of premiums on patient care rather than keeping so much for administrative costs and profits.

The Democratic plans for health care reform impose many new regulations on health insurers. Those regulations include new rules for how much insurers must spend on patient care.

In a bill passed by the U.S. House of Representatives, health insurers would be required to devote 85 percent of premiums to medical care. This would apply to all insurers, whether they are in competitive markets or not.

The Senate bill now under consideration would require insurers to report how much of patient premiums they spend on medical care but would not set a threshold.

Neither bill distinguishes between competitive or noncompetitive markets, so the rules apply to all insurers.

We'll have to wait and see if either measure becomes law. For now, we rate this promise In the Works.

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