It is all about accountability. In a time of rising costs, health insurance companies will have to be much more accountable about the manner in which they spend the money of their clients. This is one of the biggest differences introduced through the acceptance of the new health bill and insurers will have to start adapting to it. The Department of Health and Human Services (HHS) is now responsible for monitoring the work of health insurance companies, a rather serious change to the previous manner of functioning.

HHS is going to review the increase of premiums that insurance companies introduce and that are deemed unfounded. Yet, insurance companies claim that the rising costs of healthcare make it necessary for premiums to increase. These clashing views have already led to conflict and the dissatisfaction of insurers throughout the country. Insurance companies are also questioning the criteria HHS uses to review premium increases. Clear guidelines are yet to be established, which currently affects the functioning and decisions of insurance companies. Insurance companies are now becoming accountable about the manner in which health care premiums get spent. HHS uses something known as medical loss ratio. This ratio examines the percentage of money spent on healthcare against the percentage used for the insurance agency's administrative expenditures.

Insurance companies have to take in consideration limits that HHS has introduced, which demands changes in operations. Whether companies will be capable of achieving the goal is yet to be seen. Insurance companies are now asked to spend 80 cents of each dollar on healthcare in the case of individual, family and small group insurances. In the case of large corporate group clients, 85 cents should be spent on healthcare per each dollar. Medical loss ratios were introduced in the beginning of 2011 and insurance companies have already adapted to this accountability criterion. According to reports, the average medical loss ratio is 74 percent. State officials believe that some companies have achieved the ratio through specific accounting tricks that help them account for expenditure in the desirable way.

A number of health insurance companies are blamed for shifting their administrative costs towards the health expenditure through the use of clever accounting. Naturally, no company has commented on such claims. The problem with the medical loss ratio is similar to premium reviews. It lacks clear guidelines that insurance companies can follow and use to defend the policies that they are using or planning to introduce. The new health bill has made insurance companies introduce a number of changes. The full effect and the degree of adaptation needed is yet to be seen because many provisions of the bill will come into effect in the few years to come.