Despite daunting opposition, the Department of Health and Human Services has remained firm on the medical loss ratio provision of the Affordable Care Act. The medical loss ratio provision requires that insurers pay no less than 80% of premium money on improving medical care. The provision has gained rabid opposition from the nation’s health insurance companies, who have been fighting to have administrative expenses and independent insurance broker fees removed from the mandate. The HHS, however, has issued a final ruling on the matter, claiming that most of the nation’s insurance companies can meet the mandate with little to no difficulty.
Though the agency has ensured that the medical loss ratio provision will remain intact, it has made some changes to the law overall. Insurers will be able to use some of the money collected through premium payments toward improving certain services associated with consumer care. For insurers, these changes make it easier to adhere to the federal law, but some companies will still have to be creative with their finances to do so.
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The HHS claims that consumers are due to gain the most benefit from a health care system they are paying to support. While some insurers have argued that the medical loss ratio provision hampers their ability to remain financially solvent in the current market, the HHS has issued reports detailing the capability of independent agents and small insurance groups to adapt to the new federal regulation. As of now, the provision will be upheld until the Supreme Court reaches a determination on the constitutionality of the Affordable Care Act sometime next year.