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Home > Blog > Decision on delaying Texas’ MLR requirement expected soon
THURSDAY, JANUARY 12, 2012

Decision on delaying Texas’ MLR requirement expected soon

Texas insurance regulators expect a decision soon from the Obama Administration on whether they can delay forcing insurers to pay rebates to health plan members if the companies exceed new medical loss ratio requirements.

The Texas Insurance Department wants to give insurers three years to meet the provisions contained in the Patient Protection and Affordable Care Act, for it fears smaller carriers will either stop selling health insurance in the state or close, according to an NPR report.

Six states have requested delays and received approval to phase-in the MLR requirement, while eight others had their requests denied. A decision on Texas’ request to the U.S. Department of Health and Human Services is expected soon.

The medical loss ratio took effect Jan. 1, 2011, and has cost agents and brokers up to 50% of their commissions, according to a U.S Government Accounting Office evaluation last year.

The rebates are mandated if carriers spend more than 20% of individual and small-group premiums, or 15% of large-group premiums on administrative costs, including agent and broker commissions. The rebates are part of the federal health reform law designed to ensure carriers contain profits.

The landmark health reform law passed in March 2010 is subject to a U.S. Supreme Court review and nearly 20 other federal court challenges.

A spokesman for America’s Health Insurance Plans told NPR that the MLR requirement focuses cost containment effort on insurers, without dealing with the costs of doctors and hospitals, as well as drug and device companies.

Maine, which has three individual health insurers, obtained a waiver from the MLR requirement.

Texas has more than 30 individual health insurance providers.

Texas’ Democratic members of Congress want federal officials to decline the delay request. Lloyd Doggett, an Austin, Texas, congressman who chairs the Texas Democratic delegation, told NPR the delay request is “nothing more than an early Christmas gift from Gov. [Rick] Perry’s allies to insurance companies.”

www.reliableins.net

Posted 12:17 PM

Tags: decision, on, delaying, texas’, mlr, requirement, expected, soon
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