Obama administration issues sweeping new Medicaid regulation

The Obama administration unveiled a long-awaited and sweeping regulation governing the Medicaid program that imposes new limits on insurers. The regulation updates rules concerning what is known as Medicaid managed care, where states contract with private health insurers to provide benefits to low-income people through Medicaid, a system that has grown in recent years to 39 states and two thirds of enrollees. The final rule, issued Monday, imposes requirements on how much of insurers revenue must go towards paying medical costs, as opposed to administrative costs or profits. This 85 percent  “medical loss ratio,” which was previously imposed on insurers offering plans through ObamaCare’s marketplaces, has drawn resistance from insurers.