I am writing today to announce the closure of the New Mexico Independent. After three and a half years of operation in New Mexico, the board of the American Independent News Network, has decided to shift publication of its news…
While environmental activists played their part yesterday during demonstrations at the capitol building, going so far as to dress up as solar panels and to sing the tune of “You Are My Sunshine,” their counterparts, the anti-cap-and-trade contingency who has…
Roughly one quarter of University of New Mexico students are unimpressed with the state’s flagship public school, according to a survey that questioned college students about their higher education experiences.
Regulators from across the country, including New Mexico’s Insurance Superintendent Johnny Montoya, voted overwhelmingly this week to limit the amount of premiums health insurance companies can spend on administrative costs.
Under the new federal health care law health insurers will be required to spend 80 percent – and in some cases 85 percent – of what they collect in premiums on medical costs, leaving only so much for administrative expenses.
The move by the National Association of Insurance Commissioners (NAIC) effectively approved a proposal that prohibits health insurers from counting fraud prevention efforts and other investments as medical costs, a development that fueled the ire of health insurers who warned of dire consequences for health care consumers, according to published reports.
Montoya defended Tuesday’s vote, saying, “There were some really smart people who put a lot of time and effort into this.”
The medical-loss ratio, as it is called, is an important benchmark in the new federal law to keep health insurers from spending too much on administrative costs, supporters say.
The federal government has tasked the NAIC with helping to come up with a definition of medical cost. That led to a months-long examination by a subgroup of the NAIC that included the New Mexico Division of Insurance, Montoya said. The agency participated in weekly conference calls with regulators from other states to sort through input given by the health care industry, consumer advocates and others, said Kimberley Scott, who participated in the calls for the New Mexico insurance division.
What exactly can be counted as a medical cost had been unclear until Tuesday’s vote by the NAIC, which cleared away some of the uncertainty.
Insurers had hoped the NAIC would count fraud prevention efforts and other investments as medical costs. But with Tuesday’s vote, the NAIC sent a message that they might not be, prompting an industry association to predict dire consequences for consumers, according to published reports.
Under the new federal healthcare reform law, health plans must spend at least 80 percent of premiums in the individual and small-group markets on health care and 85 percent for large group plans, according to The Hill.
If they fall short, the plans must offer rebates to their customers, the Hill reported.
The state insurance division is no stranger to the concept of medical loss ratios. The New Mexico Legislature passed its own version of medical-cost loss thresholds that was signed into state law earlier this year.
“Quite honestly the staff has been working on it as long as this (NAIC) sub group,” Montoya said.
