While many provisions of the Affordable Care Act have been submerged in controversy, one provision, in particular, has garnered the ire of the insurance industry. The new federal law requires all health insurers to spend at least 80% of the money the collect from premiums on improving medical care for patients. If insurers cannot meet the standard, they are required to return the money to policyholders. This single provision has major financial implications on the nation’s insurers, both big and small. Insurers have been petitioning state lawmakers to obtain a federal waiver, freeing them from the requirements imposed by law. In Georgia, it seems they have been successful.
Georgia has obtained a federal waiver that will make the state’s health insurers exempt from the new requirement. Instead, the state will phase in the new requirement at a slow pace, allowing insurers to acclimate accordingly. Georgia is the eighth state to receive such a waiver and may not be the last. Insurers around the country have been campaigning to get the mandate repealed or, otherwise, have the state Legislature obtain an official waiver. Small insurance companies have been particularly vocal over the issue, as the mandate may actually lead them to financial ruin.
_________________________Random Quotes to Remember ~ “Even if you are on the right track, you’ll get run over if you just sit there.” – Will Rodgers
According to the state’s Department of Insurance, the new standard will be set at 70% for 2012, and will increase each year until it reaches the full 80% mandated by the Affordable Care Act.