North Dakota became the first state to be denied an exemption from the medical-loss-ratio provision (PDF) of the healthcare reform law, HHS officials said Friday.
HHS denies medical-loss-ratio exemption for North Dakota
The MLR provision in the Patient Protection and Affordable Care Act requires that insurance companies in the individual market spend at least 80% of premium dollars on medical care, or else provide rebates to their customers in 2012. Currently, 12 states and Guam have all submitted applications to be exempted from this requirement.
Steve Larsen, director of CMS' Center for Consumer Information and Insurance Oversight, said in a conference call with reporters that there did not appear to any market destabilization in North Dakota, which is why the agency denied its application.
“This should be viewed as a good thing for North Dakota and not a bad thing,” said Gary Cohen, director of CCIIO's office of oversight. “It means consumers are already seeing the benefits of the Affordable Care Act and the MLR provision.”
Meanwhile, HHS granted reprieves to Iowa and Kentucky, although the agency made modifications to those states' original proposals. Insurance companies in Iowa will be required to reach a 67% target (PDF) for 2011, 75% for 2012, and the full 80% standard for 2013 and beyond, Larsen said. And Kentucky's application was approved (PDF) in such a way that insurance companies must reach a 75% standard for 2011 and the full 80% level for 2012 and beyond.
Applications for Delaware, Florida, Georgia, Guam, Indiana, Kansas and Louisiana are still pending.
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