State Wants to Exempt Health Insurers from 80% Rule (Milwaukee Journal Sentinel)

Wisconsin is the latest state to request an exemption from the PPACA’s mandate that insurers spend 80% of their profits on medical care, stating that the provision may force smaller insurers to withdraw from the market, harming consumers. Specifically, six of the 24 companies that sell insurance in the individual marketplace could be affected by the regulation, the State Office of Insurance has said. Commissioner Ted Nickels has asked that the rule be adjusted, proposing a threshold of 71 percent this year, 74 percent next year, and 77 percent in 2013.

Despite affirmation last year from multiple insurers that they would have no trouble meeting the new requirements, Nickels wrote in his letter to the Department of Health and Human Services: “”It is clear that health insurers participating in the Wisconsin market face numerous obstacles in meeting the required 80% (medical-loss ratio).”