FL Still Fighting MLR Waiver Denial; KS, OK Denied

Like a battered fighter who keeps coming back for another round, Florida is not giving up on its quest to be granted a waiver from the medical loss ratio requirements required by the Patient Protection and Affordable Care Act.

Florida officials have appealed the Centers for Medicaid & Medicare Services' decision to deny the state's request for a waiver to allow health insurers more time to meet the MLR requirements.

In a December 30, 2011 letter to CMS's Steve Larsen, the Florida insurance commissioner, Kevin McCarty, contends that 'failure to obtain the requested adjustment will cause permanent, irreparable harm to our market and the distribution channel for health products and services.'

The PPACA requires that health insurers spend no more than 15% to 20% of their annual premium dollars for individual policies on administrative expenses beginning in 2011. Health plans that don't meet the MLR standard must provide a rebate to their customers.

In the waiver request filed with CMS in March 2011, Florida officials asked for an adjustment of the MLR standard to 68%, 72%, and 76% for 2011, 2012, and 2013, respectively.

That request was denied in mid-December 2011. At that time Larsen noted that with 20 carriers, Florida has a very competitive individual health insurance market and there was no indication that meeting the MLR requirement would create a hardship for the insurers.

McCarty's letter, which also requests 'further time to augment and amplify' the state's waiver application for reconsideration, refers to the departure of six carriers as proof that 'significant damage to our marketplace has already occurred.' While noting that the six represent a 'relatively small portion of the marketplace,' the letter contends that the departures 'translate into fewer products and less competition' for the individual market.