States should be careful about trying to require that health insurers spend a minimum percentage of premiums on paying claims.
J.P. Wieske, director of State Affairs for the Council for Affordable Health Insurance, Alexandria, Va., a group that promotes a free-market approach to health insurance regulation, makes that argument in a comment on proposals in California and Pennsylvania that would require health insurers to spend at least 85% of collected premiums on paying for health care.
Administrative expenses include the cost of paying state taxes, managing patient care and providing customer service as well as agent commissions and profits, Wieske writes in the comment.
