Texas petitions federal government to delay enactment of the medical loss ratio provision of the Affordable Care Act

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Texas Health InsuranceAs some states seek exemptions from the controversial medical loss ratio provision of the Affordable Care Act, Texas officials are looking to the enacted of the plan delayed. The provision requires insurance companies to spend at least 80% of the money they collect from premiums on improving medical care. Insurers have been opposed to the provision since it was passed in 2010, arguing that it would hurt their ability to stay competitive in the market. Federal regulators have, thus far, been unwilling to cave to the concerns of insurers.

State insurance regulators fear that many of the insurance companies in Texas will not be able to meet the required 80% standard of the provision. According to the law, if insurers fall short of the standard, they must return the money they have collected to policyholders. Regulators claim that as much as $160 million could be returned to consumers next year because some insurers do not meet the standard.

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The Texas Department of insurance has petitioned the federal government to delay the provision. Regulators are looking instead to implement the plan over the next three years as a way to mitigate the impact of the plan. The Department of Health and Human Services, the agency that oversees the implementation of the Affordable Care Act, has yet to approve of the state’s request. In the past, the agency has denied these requests, claiming that the majority of insurers can meet the federal standard with little to no problem.

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