House holds small business health care hearing

Dec. 19, 2011

The House Small Business Committee’s Subcommittee on Investigations, Oversight and Regulations has held a hearing titled “New Medical Loss Ratios: Increasing Health Care Value or Just Eliminating Jobs?”

According to the Automotive Service Association (ASA), the Patient Protection and Affordable Care Act (PPACA) and its regulations require health insurance companies to devote a minimum percentage of the premium dollars to health care services and activities that improve health care quality. This percentage is called the Medical Loss Ratio (MLR).

Insurers must spend a minimum of 80% of the premiums of individual- and small-group market customers on medical claims and no more than 20% on administrative expenses, or pay rebates to their policyholders beginning in 2012.

 “We all want quality health care and affordable insurance premiums,” says Mike Coffman (R-Colo.), chairman of the subcommittee. “But the MLR is likely to deter small insurers from entering the market and hasten the exit of established ones.”

To view details regarding the committee hearing, visit ASA’s legislative website at