New insurers rule meets resistance from Florida, Iowa

Florida officials plan to ask for a bye on the new health law's requirement that insurers spend at least 80 percent of premiums on medical care, and refund policyholders if they fall short, the St. Petersburg Times reports. "Pressed by the insurance industry, state regulators will soon ask the federal government for a waiver from the requirements, which begin Jan. 1. The Florida Office of Insurance Regulation [OIR] confirmed Tuesday it will request a reprieve until 2014, when the health care law's coverage guarantees kick in" (DeCamp, 11/24).

"The OIR has expressed concern that these ratios could destabilize the marketplace because smaller companies might not be able to meet the requirement," South Florida Business Journal adds. "It also is worried that insurance agents could get squeezed out of the market because their fees aren't considered medical costs." Florida already requires HMOs to spend 70 percent of premiums on health services (Bandell, 11/23).

An official at the regulator's office told the Orlando Sentinel the request will be filed soon. "Due to the voluminous nature of the information required by HHS, which includes operational and financial information about insurers in the individual marketplace, the Office anticipates needing roughly two weeks to compile and review the information for the application. ... Again, the process is ongoing as the Office continues to evaluate the HHS interim financial regulation issued yesterday" (DeSlatte, 11/23). 

And, the Des Moines Register reported earlier in the week: "Iowa Insurance Commissioner Susan Voss said Monday she plans to continue seeking an exemption to the new medical-loss-ratio requirements the federal government is imposing on health insurers." In September, Voss asked to ease in the new rules, writing in a letter to federal officials, "Without such a waiver provision, I believe the federal standard will disrupt our individual health insurance market" (Leys, 11/22).

The New York Times Prescriptions Blog: Meanwhile, in regard to so-called "mini-med" plans, "Administration officials have argued that these policies are better than nothing, at least until the full law goes into effect in 2014. And the final regulations they unveiled on Monday exempt these plans from the requirement that insurers spend at least 80 cents of every dollar in premiums they collect on the welfare of patients. Earlier, federal officials had granted many of these plans one-year waivers so employers like McDonald's could continue to offer these policies." But Sen. John D. Rockefeller IV, D-W.Va., said Monday he will "take a close look at exactly how these plans are operating" (Abelson, 11/23).

Finally, as Kaiser Health News notes, "even as administration officials embark on a broad expansion of federal oversight of the health insurance industry, they're up against this reality: Average Americans want premiums to go down, not just go up more slowly. And there's no single magic bullet - not even the spending rules - that will do that." Meanwhile, many blame every premium increase on the law, despite estimates that only one or two percent of next year's increases are attributable to the law's changes (Appleby, 11/23).