MLR Waiver Bill Would Shift Power to States
A waiver process permits individual states to apply for an MLR exception (an implementation delay or reduction) if meeting the 80/20 standard could destabilize the state's individual and small group market. Only 17 states took that step in 2011. CMS has granted waivers for seven states and denied waivers for 10.
Supporters of the waiver move contend that states know more about their markets than federal government analysts sitting in Washington, DC.
Critics contend that the shift to state approval for MLR waivers will create a patchwork system that will take money out of the pockets of consumers and give it to insurers. They point to states like Florida, whose waiver application drew criticism for its lack of substance. Its initial application and appeal were both denied by CMS.
In an e-mail exchange, Rep. Henry Waxman (D-CA) noted that "if the 10 states that could not substantiate their waiver requests had actually gotten a waiver, premiums would have been $360 million higher for 3.8 million consumers in those states."
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