The federal government announced today that it has denied Florida’s request to phase in a medical loss ratio (MLR) requirement for health insurance companies.

According to the Centers for Medicare  and Medicaid Services, the federal agency has “determined that the evidence presented does not establish a reasonable likelihood that the application of the 80 percent MLR standard will destabilize the Florida individual market. Consequently, we have determined not to adjust the MLR standard in the Florida individual market and, thereby, ensure that consumers receive the full benefit of this provision of the Affordable Care Act.”

MLRs are used to set a standard on the amount of money collected through premiums that health insurance companies must spend on actual services, as opposed to administration. In this case, insurance companies in Florida will be required by federal law to spend 80 percent of the money they collect on health services and a maximum of 20 percent on administration.

GOP legislators and business groups have been some of the most vocal opponents of the requirement. The state asked that it receive an exemption from the mandate and instead phase in the MLR over time.

Today’s decision by the federal government represents a big win for consumer and patient advocates in the state.

Groups such as Florida CHAIN, Florida PIRG and HCAN (which were all cited in the decision) have been asking the feds to not allow Florida to opt out of implementing the MLR mandate.

Deputy Administrator and Director for the Center for Consumer Information and Insurance Oversight Steven Larsen said during a conference call today that there was an “unprecedented” amount of public comment on the state’s request.

“Over 3,000 Florida residents” asked that the waiver not be granted, Larsen said, as well as 20 advocacy groups.

“Up until this point … Florida represents the highest amount of public input,” he said.

Larsen also said the agency did not agree with Florida’s argument that insurance companies would leave the state as a result of the new law.

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