States are winning some and losing some in the effort to gain flexibility in administering the new federal minimum medical loss ratio (MLR) rules.
Congress added the MLR rules to the Patient Protection and Affordable Care Act of 2010 (PPACA) in an effort to press health insurers to control health care costs. The rules require insurers to spend 85% of large group revenue and 80% of individual and small group revenue on health care and quality improvement programs.
A state can ask the U.S. Department of Health and Human Services (HHS) to let it ease the rules for individual health insurance business if it presents evidence that applying the PPACA MLR rules exactly as recommended by HHS would destabilize its individual health insurance market.
Analysts at Avalere Health L.L.C., Washington, a health policy firm, have waded through minimum medical loss ratio (MLR) waiver application documents and found that 17 jurisdictions have filed MLR waiver requests and 34 have not.
Maine asked for permission to set its individual market minimum MLR at 65%, and HHS officials approved that request without asking for changes.
HHS officials approved the waiver applications filed by Georgia, Iowa, Kentucky, New Hampshire and Nevada, but it gave those states less flexibility than they asked for, the Avalere analysts say.
HHS officials rejected waiver applications from Delaware, Indiana, Louisiana and North Dakota, contending there is not enough information that applying the standard MLR requirements will destabilize those states’ individual health insurance markets, the analysts say.
Many plans will comply with the MLR requirements by paying rebates, but the analysts note that carriers also may comply by increasing spending on quality improvement activities, or by adjusting cost-sharing features, such as co-payment levels, the analysts say.
MediBid uses doll people to explain what is happening with the PPACA MLR controversy outside Lego land.