Uniform Medical Insurance - Medical Insurance

Where Does Health IT Fit Into the Medical Loss Ratio? iHealthBeat

20.05.10

A provision in the new health reform law requires health insurers to spend a minimum percentage of premium dollars on direct health care services or activities that improve health care quality. The medical loss ratio provision, which goes into effect Jan. 1, 2011, aims to ensure that consumers' premium dollars go toward medical care, rather than administrative expenses, advertising, executive pay or insurers' profits.

But in which category does health IT fall?

Background on MLR Provision

Under the reform law, insurers in the individual or small group market must have a minimum MLR of 80%, while insurers in the large group market must have a minimum MLR of 85%. Health plans that do not meet the required MLRs must provide annual rebates to their members.

The reform law does not offer details on what activities should count toward clinical care and what activities should be considered administrative expenses. Instead, the law directs the National Association of Insurance Commissioners to develop uniform definitions and methodologies for calculating MLR. NAIC's definitions and methodology are subject to certification by HHS Secretary Kathleen Sebelius.

Source:

Surge in Medical Insurance

Historically Insurance has been in existence for over three centuries in this world. Due to its enormous growth, it has been classified into various classes depending upon the type and nature of the risk involved. The major traditional classes of insurances are medical, motor, property & marine. It is found that medical together with motor constitute almost half of the insurance portfolio of the total insurance business. These classes of insurance are also known as attrition class of business as losses do occur with regular frequency. Medical insurance is more prone to attrition than any other class of insurance.

In Saudi Arabia, insurance sector has been poised for rapid growth and the major growth will be in the area of health insurance since the government has started applying cooperative health insurance scheme to expatriates working in the private sector. This scheme is being applied to expatriate workers and their families in three phases. In the first phase, companies which employ 500 or more employees are obliged to implement the scheme for their expatriate staff. In the second phase, the scheme is applied to expatriate employees in companies employing more than 100 foreigners. In the third phase, it is applied to all companies and all expatriates including domestic servants. Lately, the government has decided that expatriate workers must have health insurance coverage for the application and renewal of their Iqamas (resident permits). This decision has given a fresh boost to the Kingdom's health insurance sector.

The cooperative health insurance scheme was approved by the Council of Ministers in 1999 with the objective of regulating the mandatory medical insurance and to reduce government expenditure in the health sector. The overall average expenditure in the Saudi health sector amounts to SR 37.4 billion per year, of which 29.9 billion is government expenditure and the remaining SR 7.5 billion is accounted for by the private sector.
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