Palm Beach Post: FL Files for HHS Medical Loss Ratio Waiver

Florida insurance commissioner to feds: Let us off the insurance rebate hook

by Stacey Singer

Florida Insurance Commissioner Kevin McCarty

Just in case the Affordable Care Act ultimately is found constitutional, Florida’s Office of Insurance Regulation today asked the U.S. government to waive the requirement that insurance companies here give rebates to consumers if they don’t spend enough on actual medical care.

Starting this year, the Obama administration’s health overhaul requires insurers to spend 80 to 85 percent of premiums on medical care as opposed to overhead, agents’ commissions and salaries. If they don’t, the law says they can be forced to send checks back to their customers.

In his request for the waiver, Florida’s insurance commissioner, Kevin McCarty, said that rule could cause insurers to leave the state, harm agents and limit consumer choice.

Florida said one small insurance company said it will leave the individual insurance market if it must meet those margins, and others could follow, possibly affecting up to 52,000 people.

Worse, new insurance companies would be unable to launch, the petition argues, because startups have significantly higher administrative costs than existing companies. This could pose a problem for the state as it tries to move most Medicaid patients into HMOs or other private insurance programs.

This week the U.S. Department of Health and Human Services granted its first waiver of the 80-85 rule to Maine, a state with significantly fewer insurers than Florida.

Other states including Nevada, Kentucky and New Hampshire have similar requests pending before the federal agency.

Tags: insurance

This entry was posted on Friday, March 11th, 2011 at 5:26 pm and is filed under Health reform.

Kevin Wrege

Founder & President

Pulse Issues & Advocacy LLC

Office: 202-625-1787

Mobile: 202-253-4929

4410 Massachusetts Ave., NW, #150

Washington, DC 20016

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