Health Insurance Reform in Favor of Consumers

On Thursday, suggestion on how to implement a new insurance law in line with the health reform, insurance regulators of the United States recommended to president Obama to decide in benefit of the consumers rather than the insurance co operations.

The new insurance law contains that from 20100 onwards, the so called "medical loss ratio" contains that insurers need to reinvest 80 to 85 per cent of their total revenue in medical care improvement for their costumers which leaves them with 15% to 20% per cent for administration expenses and final profit.

The Government is now to decide which activities fall under the improvement of medical care for insurers' clients. The decision will be made with help of advice from the National Association of Insurance Commissioners.

The final draft of recommendations define the improvements of patients' medical care as investing in patient safety, spending money for health information technology and improve hospital conditions.

Investments for measures to decrease fraud or support of brokers commission in the insurance industry belong to administrative costs, a fact that cause disapproval among insurance agencies.

Timothy Jost, representative of health insurance consumers, agrees on the recommendations: "There's no end to what [insurers] would have wanted to put under 'quality improvement' if they could have," he said. "But the NAIC looked at this really carefully through a process of months, and the industry was on every one of the calls and had a great deal of input."