Dylan Scott is a GOVERNING staff writer.
E-mail: dscott@governing.comTwitter: @dylanlscott
Federal News
HHS Denies Medical Loss Ratio Waivers for Kansas and Oklahoma
The U.S. Department of Health and Human Services (HHS) denied waiver requests Wednesday from Kansas and Oklahoma to lower the required minimal medical loss ratios (MLR) under the Affordable Care Act (ACA).
The ACA requires insurance companies to spend at least 80 percent of money earned from individual and small group plan premiums on medical costs, while the remaining 20 percent can go toward administrative costs and profits. If they fail to meet those standards, companies must provide a rebate to customers starting in 2012.
Oklahoma had requested a minimal MLR of 70 percent in 2012 and 75 percent in 2013 in its application. Kansas asked to set its minimal MLR for 73 percent in 2012 and 76 percent in 2013. States must argue that the 80 percent rate increases the "likelihood of destablizing the individual market" for a waiver to be approved, according to HHS. Plans in all states must reach the 80 percent minimal MLR by 2014
HHS has approved six state waivers -- Georgia, Iowa, Kentucky, Maine, Nevada and New Hampshire -- for miminal MLRs, which took effect on Jan. 1, 2011. Eight states total -- Delaware, Florida, Indiana, Kansas, Louisiana, Michigan, North Dakota and Oklahoma -- have had their applications denied. Waiver requests from North Carolina, Texas and Wisconsin are still under review, according to the Center for Consumer Information and Insurance Oversight's website.
Copies of the HHS letters to Kansas and Oklahoma are included below.
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