Texas lawmakers look to rebuke application for medical loss ratio exemption

Medical Loss RatioTexas legislators are urging the state’s Insurance Commissioner, Eleanor Kitzman, to withdraw an application for exemption from the medical loss ratio provision of the Affordable Care Act. The provision requires health insurers to pay no less than 80% of the money they collect through premiums on improving medical care. The provision has been a point of contention for insurers, who have fled some states that were unable to attain a waiver from the rule. Commissioner Kitzman is looking for an exemption to prevent an exodus of insurers from the state.

Lawmakers opposing the exemption claim that the waiver would cost consumers more than $260 million in higher premiums. Currently, many of the health insurance companies in Texas do not meet the medical loss ratio standard. Regulators estimate that insurers could be paying as much as $350 in rebates for each policyholder in the state, which would have to be offset if the state were granted a waiver. The only way to mitigate the impact of the rebates would be to raise rates on insurance coverage. State regulators would then be obliged to grant approval for higher rates or risk having insurers flee the state, leaving thousands uninsured.

Legislators are urging consumers to contact the state’s Department of Insurance to express their disinterest in the state attaining a waiver. Commissioner Kitzman has yet to officially withdraw the application or make any mention of her plans going forward.

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