MLR Waiver Bill Would Shift Power to States

Margaret Dick Tocknell, September 20, 2012

A key waiver provision of the Patient Protection and Affordable Care Act would be amended under a medical loss ratio (MLR) bill scheduled for mark-up Thursday before the House Energy and Commerce Committee.

That provision of HR 1206 would give states the final say on MLR waiver requests. MLR waiver authority now rests with the Centers for Medicare & Medicaid Services.

The ACA requires insurers to spend no more than 20% of premium payments collected for the individual and small group market on administrative expenses such as salaries, overhead, and markets. The remainder, up to 80% of premium dollars, must be spent on direct patient care and efforts to improve care quality.

Insurers that fail to meet that standard are required to make financial rebates to their members.

This year insurers rebated $1.1 billion to 12.8 million members.

Margaret Dick Tocknell Margaret Dick Tocknell is a reporter/editor with HealthLeaders Media.


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