In a hearing last week, the U.S. House of Representatives Energy and Commerce Subcommittee on Health considered legislation that would repeal the medical loss ratio (MLR) provision of the Affordable Care Act (ACA).

The MLR provision (Section 2718 of the ACA) requires health insurers to spend 80%-85% of all premium dollars on medical care or activities that improve health care quality. Insurers that fail to meet the MLR targets must provide their customers with rebates for the difference between actual expenditures and the target. The U.S. Department of Health and Human Services issued regulations implementing the MLR requirements in November 2010 (75 Fed. Reg. 74864). However, certain group or individual plans in effect before March 23, 2010 may be exempt from certain MLR requirements. The exemptions and requirements for grandfathered status were published in June 2010 (75 Fed. Reg. 34538).

The House Subcommittee hearing considered the MLR Repeal Act of 2011 (H.R. 2077) and a discussion draft of the legislation that would prevent enforcement of the grandfathered plan regulation. After hearings are completed, the legislation may be considered in a subcommittee and/or committee mark-up session before the committee can report the bill for consideration by the full House of Representatives.