Regulators are to vote on a key provision of the new healthcare legislative overhaul: the controversial rules governing how much insurers must spend on patients’ medical care.

The National Association of Insurance Commissioners (NAIC) has drawn up a set of draft recommendations that will be voted on by the Executive Committee and then sent to HHS Secretary Kathleen Sebelius, who will have the final say.

A key stake is the ‘medical loss ratio’, which is the amount insurers spend on medical care versus administration and profit. The law approved by Congress in March would see insurers spend at least 80% of revenues on direct medical care or issue rebates to consumers if they fail to hit the target. The debate is over what insurers can include when calculating medical care expenditure. Insurers are pressing for the broadest possible definition, while consumers push in the opposite direction.

Several last-minute amendments are worrying consumers. These would do the following: remove sales agent commissions from the medical loss ratio calculation instead of including it in administrative costs; allow insurers to calculate ratios on a national rather than state basis, which would allow insurers to average their high and low-spending policies and thus avoid paying rebates; and change a ‘credibility adjustment’ formula to allow many insurers to hit the medical spending targets, regardless of whether they actually hit the 80% target.

Following the closed-session meeting yesterday, a clear outcome will emerge after the vote today.