Insurance Commissioner Dave Jones Announces Passage of Bill to Implement the Federal Medical Loss Ratio
News: 2011 Press Release
Insurance Commissioner Dave Jones today announced that the California State Legislature passed SB 51, which would incorporate the federal medical loss ratios (MLR) provided in President Obama's Patient Protection and Affordable Care Act (PPACA) into state law. The measure was sponsored by the California Department of Insurance and authored by State Senator Elaine Alquist (D-Santa Clara).
"This bill will provide California consumers a better value for their premium dollars and ensure greater accountability for insurance companies," said Commissioner Jones. "SB 51 will create better transparency in the insurance marketplace and make it easier for consumers to realize savings when purchasing health insurance."
In March 2010, the President signed the Patient Protection and Affordable Care Act into law. This bill made significant changes to the California health insurance market and its regulatory environment. The PPACA requires health plans and insurers to have an MLR of 85% in the large group market and 80% in the small group and individual markets and also requires rebates to consumers if these MLR requirements are not met.
SB 51 proposes to further strengthen health insurance rate regulation in California by applying the federal MLR requirements to individual and group policies, and by requiring rebates in conformity with federal law.
"I urge Governor Jerry Brown to sign SB 51 which will implement broader protections for California consumers," said Commissioner Jones. "These protections include removing a barrier to access to coverage while bringing California law into conformity with provisions of the landmark Patient Protection and Affordable Care Act."
The California Department of Insurance, established in 1868, is the largest consumer protection agency in California. Insurers collect $310 billion in premiums annually in California. Since 2011 the California Department of Insurance received more than 1,000,000 calls from consumers and helped recover over $469 million in claims and premiums. Please visit the Department of Insurance website at www.insurance.ca.gov. Non-media inquiries should be directed to the Consumer Hotline at 800.927.4357. Telecommunications Devices for the Deaf (TDD), please dial 800.482.4833.