Maine has received a waiver from the new Patient Protection and Affordable Care Act (PPACA) minimum medical loss ratio (MLR) provisions.
Maine can set the minimum medical loss ratio for the individual market at 65% of revenue, to keep a unit of HealthMarkets Inc., North Richland Hills, Texas, from leaving Maine and destabilizing the state’s individual health insurance market, according to Steve Larsen, director of the Center for Consumer Information and Insurance Oversight (CCIIO) at the U.S. Department of Health and Human Services (HHS).
The HealthMarkets unit, MEGA, insures about 14,000 Maine residents, and it estimates it had a medical loss ratio of 68% in Maine in 2009, officials say.
MEGA has a 37% share of the individual market in Maine, and Mila Kofman, the Maine insurance commissioner, has only a limited ability to get other carriers to assume MEGA policies, Larsen says.
An individual and a union filed a total of three comments opposing the Maine MLR waiver application, Larsen says.
The PPACA MLR Provision
If enforced as written, the MLR provision of the Affordable Care Act – the legislative package that includes the Patient Protection and Affordable Care Act (PPACA) – will require health insurers to spend 85% of large group revenue and 80% of individual and small group revenue on health care and quality improvement efforts.
Insurance producers – and state insurance regulators — have argued that the current MLR rules could hurt consumers, by encouraging health insurers to cut producer commissions and reducing consumers’ ability to get help with coverage from licensed agents and brokers.