Health care coverage: medical loss ratio.

Existing law, the Knox-Keene Health Care Service Plan Act of 1975, provides for the licensure and regulation of health care service plans by the Department of Managed Health Care and makes a willful violation of the act a crime. Under existing law, a health care service plan is prohibited from expending for administrative costs, as defined, an excessive amount of the payments it receives for providing health care services to its subscribers and enrollees. Existing law also provides for the regulation of health insurers by the Department of Insurance. Under existing law, the Insurance Commissioner is required to withdraw approval of an individual or mass-marketed policy of disability insurance if the commissioner finds that the benefits provided under the policy are unreasonable in relation to the premium charged, as specified. This bill would require a health care service plan or health insurer to annually report to the Director of the Department of Managed Health Care or the Insurance Commissioner the medical loss ratio of each health care service plan product or health insurance policy form issued, amended, or renewed by the plan or insurer in California. The bill would require the director or commissioner to make the information reported available to the public and would require the departments to jointly adopt and amend regulations to implement these provisions in order to establish uniform medical loss ratio reporting. Because a willful violation of the bill's requirements with respect to health care service plans would be a crime, the bill would impose a state-mandated local program. The California Constitution requires the state to reimburse local agencies and school districts for certain costs mandated by the state. Statutory provisions establish procedures for making that reimbursement. This bill would provide that no reimbursement is required by this act for a specified reason.