Obama administration rejects Republican states’ health law waiver requests

By | Julian Pecquet

The Obama administration on Monday rejected two states’ requests for waivers from the healthcare reform law.

The decision could rekindle the controversy over the waiver process, as the two states that were turned down, Indiana and Louisiana, have Republican governors. GOP leaders at the state level have been extremely critical of the healthcare law and the requirements that it imposes on states.

The Department of Health and Human Services said Indiana and Louisiana do not need an adjustment from the health law’s medical loss ratio. That provision requires insurers to spend at least 80 percent of premiums on medical care or offer rebates to their customers starting next year.

HHS can grant a temporary waiver if regulators determine that the requirement looks likely to destabilize a state’s individual health insurance market.

The agency determined that the health plans of Indiana and Louisiana can meet the threshold and that consumers will get better value without an adjustment, said Gary Cohen, acting director of oversight at the HHS Center for Consumer Information and Insurance Oversight.

Indiana had asked for a 65 percent ratio in 2011; 68.75 percent in 2012; and 72.5 percent for 2013. Cohen said the state’s health plans did not need the adjustment because they’re either already meeting the 80 percent threshold, could meet it without becoming unprofitable or are already changing their business model to be able to meet it.

Louisiana had asked for a 70 percent threshold in 2011 and 75 percent in 2012. HHS said that request was based on preliminary data showing that the aggregate medical loss ratio among nondominant plans was 67 percent for 2010, while updated figures showed that figure to be 79 percent.

Read the complete article The Hill.

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