Today I unveiled a bill with Senator Jon Erpenbach that would ensure that Wisconsin health insurance customers get good value for their premiums.  The Health Insurance Accountability Act would require health insurance plans in Wisconsin to spend at least 80% to 85% of consumers’ premium dollars on medical care, depending on the type of plan.

 

The federal health care reform law already requires insurance companies to spend 80% to 85% of premium dollars on medical care, otherwise insurers must provide refunds to consumers.  However, some states, including Wisconsin, have sought permission from the federal government to escape these “medical loss ratio” requirements so health insurers can spend less on benefits and more on overhead, profit and executive salaries.

 

In October, Wisconsin’s insurance commissioner asked the federal government for an exemption from the medical loss ratio requirement for individual health plans.  Instead of having to spend at least 80% of premium dollars on benefits now, individual health insurers wouldn’t need to meet that requirement until 2014.  If the insurance commissioner’s plan is approved, Wisconsinites who buy their own insurance plans stand to lose $14 million they otherwise would have received in refunds under the current 80% medical loss ratio requirement.

 

Wisconsin consumers should always get good value for their health premium dollar.  Writing the federal medical loss ratio requirements into state law will provide them that guarantee today, tomorrow and into the future.

 

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