Mich. lawmakers back state's request for MLR waiver

The chairmen of two influential House committees on Thursday sent a letter to HHS Secretary Kathleen Sebelius supporting their home state of Michigan's request for a waiver from the medical-loss ratio provision for individual health insurance.

Mandated in last year's Patient Protection and Affordable Care Act, the medical-loss ratio provision requires that insurance companies in the individual market spend at least 80% of premium dollars on medical services.

“In Michigan, seven health plans insure almost 90% of consumers in the individual insurance market, totaling 305,003 people in 2010,” Reps. Dave Camp (R-Mich.), chairman of the House Ways and Means Committee, and Fred Upton (R-Mich.), chairman of the lower chamber's Energy and Commerce Committee,” wrote in their Aug. 4 letter to Sebelius (PDF). “Based on 2010 data, only two of the seven health plans would be able to meet the 80% MLR threshold,” they wrote, adding that combined, the seven plans would have a net estimated loss of $30.9 million in 2010 if they were forced to comply with the requirements.

Camp and Upton concluded their letter by writing that while a waiver for Michigan will not prevent the long-term effect that the Affordable Care Act will have on Americans' ability to choose their health plan, the reprieve will “partially mitigate the disruption caused by MLR.”