The Obama administration rejected waivers on Monday sought by Indiana and Louisiana to the 2010 federal healthcare law's medical-loss ratio requirement that insurance plans devote a minimum percentage of their budgets to pay for the care of enrollees.
Feds reject MLR waivers for Ind., La.
The two states' requests sought permanent or temporary waivers of requirements in the Patient Protection and Affordable Care Act that insurance companies spend between 80% and 85% of premium dollars on medical care or healthcare quality improvement, rather than on overhead costs. Insurance plans that do not meet the requirement must begin to provide rebates to their customers in 2012.
Indiana requested permanent waivers of the 80% standard (PDF) for both individual and small-group insurers that provide so-called consumer driven health plans; exemptions until 2014 for new insurers in the individual market; and to ramp up the required health spending percentage of individual market plans beginning at 65% in 2011 and rising to 76.25% in 2014.
Louisiana simply requested reducing the minimum amount of individual market health plans devoted to patient care (PDF) to 70% in 2011 and 75% in 2012.
“Neither application demonstrated an immediate need for an adjustment to the MLR standard,” Gary Cohen, acting director for the Office of Oversight at HHS' Center for Consumer Information and Insurance Oversight, said in a call with reporters.
The law allows for waivers if adherence to the insurance spending ratio would “destabilize” a state's health insurance market by driving companies out of business or sharply cutting into their profits.
So far, HHS officials have granted at least part of waiver requests by six states, while rejecting the requests of four other states in their entirety. Seven more states' requests are pending.
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