New Rules Tell Insurers: Spend More on Care

By ROBERT PEAR
NYT

WASHINGTON — The Obama administration issued new federal rules on Monday that will require many health insurance companies to spend more on medical care and allocate less to profits, executive compensation, marketing and overhead expenses.

The rules, intended to benefit consumers, vastly expand federal authority to direct the use of premiums collected by companies like Aetna, Humana, UnitedHealth and WellPoint. While some states have had such requirements, Monday’s announcement is the first such mandate by the federal government and grows out of the new national health care law.

“Millions of Americans will get better value for their health insurance premium dollar,” Kathleen Sebelius, the secretary of health and human services, said in issuing the rules.

Ms. Sebelius said the rules would protect nearly 75 million people: 10.6 million with individual policies, 24.2 million with small-group coverage and 40 million covered by large employers.

(More here.)