North Dakota Insurance Commissioner Adam Hamm, in a letter to HHS, wrote he believes “there is strong evidence that North Dakota's individual insurance market will be destabilized” if the rule is enforced. North Dakota asked for a three-year timeframe to implement the rule. In 2011, insurers in the state would be required to spend 65% of individual member premiums on medical care, rising to 70% in 2012, 75% in 2013, and then to full compliance of 80% in 2014, according to the letter. Nine insurers sell individual policies in North Dakota, of which the largest is Blue Cross and Blue Shield of North Dakota.
Susan Voss, Iowa's insurance commissioner, similarly wrote that the rule “may disrupt our individual health insurance market.” In Iowa, the dominant insurer, Wellmark, already meets the 80% medical-loss ratio standard, but “Iowa has a number of smaller carriers, which need time to adjust their business models to comply,” Voss wrote in the letter, dated March 21. Voss requested a similar three-year, phased-in approach to the rule, whereby insurers would be required to meet a 60% medical-loss ratio this year, a 70% medical-loss ratio in 2012, 75% for 2013 and 80% in 2014, according to the letter. Iowa today prescribes a medical-loss ratio of between 55% and 60% for the individual market.
Other states that have request waivers are: Florida, Georgia, Kentucky, Nevada and New Hampshire. Georgia's request was prompted by concerns that the rule's implementation will be disruptive and the law may be found unconstitutional. “I am concerned that the Obama administration has a fundamental distrust of the role that brokers and agents play in the orderly delivery of health insurance,” Georgia Insurance Commissioner Ralph Hudgens said in a news release. “It appears to me that the current law is engineered to eliminate the agent from the marketplace by reducing the commissions that can be paid on the sale of a health insurance policy.”
- With Jessica Zigmond