Indiana insurance commissioner pleas for MLR exemption as insurers flee the state

Indiana Insurance NewsAccording to the Affordable Care Act (ACA), the sweeping health care reform signed into law last year, U.S. insurers are required to spend a minimum of 80% of the premiums they collect on patient care. If they do not meet this new standard, they will be forced to issue rebates to policyholders to cover the shortfall.

This provision of the controversial health care law has been criticized by the nation’s insurance companies, with many claiming that it impedes their ability to not only compete in the market but also generate profit. Despite the complaints, however, there is no sign that the federal government will yield on the issue. And so, insurers are fleeing to states that are able to obtain federal exemptions from the measure.

Indiana Insurance Commissioner Stephen Robertson has issues an emergency petition to the federal government, hoping to obtain such a waiver. The state’s Department of Insurance claims that 10% of the state’s insurance carriers have withdrawn from the Indiana market because of the provision in question. Commissioner Robertson acknowledges the merits of the ACA but argues that the current economic climate makes some of its provisions unreasonable.

Robertson is proposing alternatives to the provision, insisting that there would be less derision against the new law if the 80% minimum medical loss ratio was introduced in phases from now until 2015. “A phased-in approach will mitigate some of the consequences faced by insurers,” says Robertson.

If the Department of Health and Human Services denies his request, Robertson fears that consumers’ choices for insurance coverage will be severely limited.

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