The old Florida capitol (Pic by Diligent Terrier, via Wikimedia Commons) A patient advocacy group is asking the feds to not grant insurance companies in Florida exemption from profit caps mandated by federal law. Florida’s insurance commissioner recently asked for a waiver of the mandate. Florida CHAIN (Community Health Action Information Network) has asked the U.S.
“„Starting this year, insurers must meet minimum “medical loss ratio” requirements. In particular, insurers in both the individual and small group health insurance markets must spend at least 80 percent of total premiums they receive on patient care and quality improvement activities. This in turn limits the amount they can divert to executive salaries, overhead and profit. Insurers that fail to meet this standard must issue rebates to their policyholders.
“„However, if a state can prove that imposing the requirement now is likely to result in an exodus of insurers, federal regulations allow HHS to adjust the requirement for up to 3 years. (This adjustment may only be requested for the individual market, where consumers purchase their own coverage directly rather than obtaining it through an employer.)
“„After first making an ineligible request for a full waiver of the 80% standard, Florida asked to phase in the medical loss ratio over 3 years. If Florida’s request is approved, insurers stand to gain an estimated $140 million in rebates that would be owed to consumers. In addition, a key incentive for insurers to keep constantly increasing premiums down would be eliminated.
“„“On October 24, 2011 the Office received notificationfrom American Enterprise Group Inc. that two of its subsidiaries will ‘exit the state’ for the purposes of individually underwritten comprehensive major medical business,” the Florida Office of Insurance Regulation said in a statement. “In a letter to the Office, American Enterprise specifically cites a ‘change in the regulatory environment’ including the Affordable Care Act’s imposition of the minimum medical loss ratios (MLR) as reasons for this decision.”
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“„The two subsidiaries that are pulling out of Florida — American Republic Insurance Co. and World Insurance Co. — underwrite 2,615 policies in the state, according to the Florida Office of Insurance Regulation. That’s about one-third of 1 percent of the 800,000 or so individual policies issued in Florida, according to the state’s waiver petition.
“„Florida has asked the federal Department of Health and Human Services for permission to phase in the medical loss ratio over three years: 68 percent for 2011, 72 percent for 2012 and 76 percent for 2013.