HHS took issue with Louisiana’s claims about the individual insurance market. Ind., La. health waivers nixed

The Department of Health and Human Services has denied Indiana’s and Louisiana’s requests for temporary relief from health reform’s medical loss ratio requirements, making them the third and fourth states to have their applications rejected outright.

The states join North Dakota and Delaware as those rebuffed in waiver requests. The four states wanted to more slowly phase in the health law’s requirement that insurers in the individual market spend at least 80 percent of consumers’ premium dollars on medical care. Under the 2010 health law, insurers found to fall short of that requirement must give consumers a rebate.


Indiana’s application had been somewhat of a long shot, as it requested several adjustments — including seeking a longer phase-in period, hitting 80 percent by 2015 — beyond what the MLR regulation allows. The HHS denial letter notes that only one insurer in Indiana’s individual market would no longer be profitable after issuing a MLR rebate if the standard were in effect today — and that insurer is already changing its business practices to adapt to the new environment.

“It appears to us all [the insurers] would remain in the market with an 80 percent standard,” Gary Cohen, acting director of oversight at the Center for Consumer Information and Insurance Oversight, said on a conference call with reporters Monday.

Louisiana had sought an adjustment that would have lowered the threshold to 70 percent in 2011 and 75 percent in 2012, giving the state until 2013 to meet the new standards. But HHS took issue with Louisiana’s claims that the health overhaul was already forcing insurers out of the individual market. The department’s denial letter noted that two insurers that withdrew from the state for business reasons were not active in the individual market. Another insurer that blamed its withdrawal on the new rules had only 12 people covered in the individual market.

HHS has entirely or partially approved MLR adjustment requests for six other states. Decisions are still due in Florida, Kansas, Michigan, North Carolina, Oklahoma, Texas and Wisconsin.