The Florida Current reports that the federal government announced it will take another 30 days to decide whether to grant Florida a waiver for a mandated profit cap for certain health insurance companies.
According to the Current:
The federal government sent a letter to the state advising that it would take another 30 days to determine whether it should exempt individual carriers from meeting a requirement that 80 percent of the premium it collected for individual policies be directed toward patient care.
The letter to the state said the objective is to “render a decision” on the state’s waiver request “in advance of the end of the 30 days extension.”
Florida Insurance Commissioner Kevin McCarty told The Florida Current on Wednesday that the extension letter was not a surprise: “I actually expected it. I think that Florida’s application is probably more comprehensive and more complex than a number of states’” waiver requests.
The waiver would be for a required medical loss ratio mandated by the federal government. Medical loss ratios set the amount of money collected by premiums that must be spent on actual services, as well as a limit on how much goes to administration. In this case, insurance companies will be required by federal law to spend 80 percent of the money they collect on services and 20 percent on administration.
The state has asked the federal government for permission to phase in the medical loss ratio over three years, as opposed to meeting the requirements as soon as they kick in.
Advocacy groups such as Florida CHAIN (Community Health Action Information Network) have asked the U.S. Department of Health and Human Services “to reject a request by Florida’s Insurance Commissioner to grant insurance companies a reprieve from new Affordable Care Act requirements intended to ensure that consumers get value for the health insurance premiums they pay.”
The group says that “if Florida’s request is approved, insurers stand to gain an estimated $140 million in rebates that would be owed to consumers.”
“In addition,” the group adds, “a key incentive for insurers to keep constantly increasing premiums down would be eliminated.”
Health Care for America Now, a national health care advocacy organization, has even asked Health and Human Services to hold “a public hearing on the state of Florida’s request to be exempted” from rules they say “would require insurance companies to send $140 million in premium rebates to families,” the group’s press release says.
In an effort to prove that the medical loss ratio mandate will run insurance companies out of Florida, two small insurance companies in the state have actually decided to close their doors.
The feds decision should be announced by Dec. 16.