Understanding MLR Waiver Requests
- Maine. HHS accepted the state's request for an MLR of 65% for 2011 and 2012 with a possible extension to 2013. MEGA Life & Health Insurance Co. covers about one-third of the individual market and threatened to leave the market if required to meet the 80% standard in 2011 and 2012. MEGA offers lower cost policies and HHS was concerned that individuals would not be able to replace the policies if MEGA left the state.
- Nevada. The state requested a 72% MLR standard for 2011. HHS agreed to a 75% adjustment. HHS noted that seven of Nevada's top 10 issuers are expected to have 2011 MLRs above the 72% requested by the DOI.
- New Hampshire. The state DOI requested a 70% MLR standard for 2011, 2012, and 2013. HHS agreed to 72% for 2011, 75% for 2012 and 80% for 2013. In making the decision HHS recognized potential losses that some insurers might incur if rebates were necessary. It noted that individual policies in the state are medically underwritten and if a firm dropped out of the market members with pre-existing conditions might have a difficult time finding alternate coverage.
Granting the waivers is controversial. Advocacy groups contend that HHS is taking rebate money out of the pockets of consumers and that HHS is granting waivers based on little or no evidence that a given insurer will actually leave a state.
Carmen Balber, the Washington, D.C. director for Consumer Watchdog, points out that many states have a requirement that once an insurer leaves a state it can't return for five years. With billions of dollars in premium tax credits coming online for insurers in 2014 threats to walk away from a book of business could be nothing more than empty threats.
But the NAIC's Jost says reducing the cost of healthcare insurance premiums – not assessing rebate penalties ? is the real goal of the MLR requirement and that's where the focus should be.
Margaret Dick Tocknell is a reporter/editor with HealthLeaders Media.
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