Earlier in the year, Indiana’s Department of Insurance submitted an official request to the federal government seeking to free the state’s insurance companies from the medical loss ratio requirement of the Affordable Care Act. The health care law dictates that all insurers should spend no less than 80% of the money they collect on premiums on improving medical care. According to the law, if companies fail to meet the requirement, they must return the money to consumers. Indiana’s request for an exemption from the rule has been denied by the Department of Health and Human Services.
State legislators claim that insurers are fleeing Indiana because of the rule. The HHS, however, claims that there is not enough evidence to support this claim, saying that market conditions in the state have, thus far, remained unchanged. Other states have sought waivers from the rule, but the majority of these requests have been denied by the HHS. The agency says that the law is in the best interest of consumers and is necessary to provide these consumers with protections.
Indiana’s Insurance Commissioner, Stephen Robertson, submitted the application for exemption early this year. Robertson highlighted five insurance companies that had fled the state citing the medical loss ratio rule as the primary reason. The HHS investigated the matter and found that the largest insurer included in Robertson’s application had never done business in Indiana.