Medicare has an MLR for private Advantage and Part D plans, but Medicaid managed care was about the only area of the private insurance market untouched by a national MLR. Until now: The new rules proposed by CMS would set a federal MLR of 85 percent for those plans starting in 2017. States would not, however, be required to recover money from insurers that fail to meet that threshold, as Obamacare did. Health care companies weren't happy about the prospect before the regulations came out. "The concept of MLR sounds great, until you actually look at a Medicaid state-to-state planning organization," Jeff Myers, president and CEO of Medicaid Health Plans of America, the industry's trade group, said before the rules were released. "That's where it kind of falls apart." The administration's thinking behind the proposal isn't too hard to figure out. "There's a lot of federal money in the program. The same reasoning that would lead you to think that a minimum MLR is a prudent thing in the private market I think would operate in this sphere also," said Julia Paradise, associate director of the Kaiser Commission on Medicaid and the Uninsured, before the regulations came out.

The Obama administration released new rules last week of Medicaid managed care programs, the first rules update in over a decade. The rules apply to the private insurers who primarily manage long-term care in numerous states. They include a concept that Obamacare applies to private insurance companies which is being universally panned by the companies who provide Medicaid managed care in various states: the medical loss ratio (MLR) which mandates insurers spend between 80 and 85 percent of premiums on health care versus administrative expenses.The problem, the companies argue, is that the definitions of health care and administrative costs might not be so easily differentiated in long-term care for the elderly or disabled. Here's one example: "some managed care plans pay for air conditioning for an enrollee to keep them out of the hospital—is that an administrative or health care cost?"

The other problem is that the 39 states that use private companies for Medicaid long-term care have had a lot of leeway in regulating them—or not. It could compound the political difficulties the administration is having in convincing some of these states to expand Medicaid.