Health insurance industry efforts to lobby for weaker federal regulations should be strongly resisted, a consumer advocacy group warned this week.

In a letter to Health and Human Services (HHS) Secretary Kathleen Sebelius, California-based Consumer Watchdog asks that she reject insurers' attempts to weaken regulations on how much insurers can raise premiums and how much they have to spend on care. The letter points to a recent story in The Hill outlining the insurance industry's plans to lobby federal regulators as cause for concern.

"Two provisions of the law to at least curb the premiums consumers pay are now in your court," research director Judy Dugan and Washington director Carmen Balber wrote. "The insurance industry, in the wake of the midterm election, is refocusing its efforts against these provisions on your agency."

One such provision is the medical loss ratio (MLR), which requires plans to spend at least 80 or 85 percent of premiums on medical care and quality improvement rather than administration and profits. The National Association of Insurance Commissioners (NAIC) last month adopted MLR regulations, but they await HHS certification, which is expected any day now.

The letter asks that HHS reject insurers' proposed changes to the NAIC regulations, including:

– Aggregation, which would allow insurance companies to measure their medical loss ratio at the national instead of state level (large insurers support this, but smaller ones do not); 

– Deduction of insurance broker fees from premiums before measuring the ratios; and

– A larger "credit" of MLR points for plans that have too little sales volume to be statistically credible (NAIC has proposed a 14 percentage point credit).

The letter also asks HHS to reject certain aspects of the NAIC recommendation. Consumer Watchdog objects to provisions that: allow public health marketing campaigns to be counted as "health quality improvements"; deduct a large share of federal and state taxes when calculating the ratio; and allow insurers to justify in regulatory filings closed to the public why questionable expenses should be counted as quality improvements.

The letter also takes HHS to task for its delay in determining when proposed rate hikes will be considered "unreasonable," which under the new law requires insurers to file a public disclosure form justifying their rates.

"Your department's delay in releasing this definition," the authors write, "undermines consumers' trust in health reform and encourages insurers to continue bullying consumers with unfair premium hikes."

Consumer Watchdog has proposed that an "unreasonable" premium increase be defined as one that is: more than 10 percent greater than 150 percent of the rate of medical care inflation (as calculated by the Bureau of Labor Statistics); or is proposed by an insurer that failed to meet its medical loss ratio target in the previous year.

That definition is also expected shortly.