Reuters is reporting that Health insurance companies are at it to beat the law. These laws include provisions such as large group plans are required to spend at least 85 cents the dollar collected on actual medical care as opposed to administrative costs. The small group plans and individual plans have to spend 80 cents on the dollar. So some of the largest U.S. health insurers are changing their accounting practices to book administration costs as medical costs in an attempt to circumvent new industry reforms, according to a U.S. Senate panel's report released on Thursday.
One insurer WellPoint Inc "has already 'reclassified' more than half a billion dollars of administrative expenses as medical expenses," according to the report. The MLR rule does not come in to effect until January 1, 2011, but according to Senator John Rockefeller, the committee's chairman insurers are "still far below" what the law will requires.
reuters
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