The Buzz

From the staff of the Tampa Bay Times

Feds reject Florida's request for health care waiver

15

December

In a decision praised by consumer groups, President Obama's administration on Thursday rejected Florida's request for a health care waiver under the federal Affordable Care Act. The state sought to alter the medical loss ratio (MLR), also known as the 80-20 rule, which requires health insurers to spend 80 percent of their premiums on direct care as opposed to overhead and administrative costs.

Florida Insurance Commissioner Kevin McCarty had filed a request with the U.S. Department of Health and Human Services to adjust the MLR downward, to 68, 72 and 76 percent for 2011, 2012 and 2013 respectively. Consumer groups had lined up to strongly oppose any adjustment to the ratio and more than 3,000 residents had signed a petition opposing the request.

Under the so-called Obamacare law, health insurers are required to provide rebates to policyholders if they do not meet the 80 percent threshold. The feds said Thursday they have not yet determined how the rebates would work.

In deciding whether to grant a waiver, the feds apply what's called a destabilization test to determine whether one or more companies are likely to withdraw from the state's individual health care market if the MLR remains at 80 percent. The government decided that would not happen in Florida, a state where six large insurers contro about 85 percent of the individual health care market.

"We do think it's a competitive market" in Florida, said Steve Larsen, director of the Center for Consumer Information and Insurance Oversight at HHS.  

[Last modified: Thursday, December 15, 2011 3:11pm]

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