government
HHS denies Michigan exemption to insurance spending regulations
NEWS IN BRIEF — Posted Jan. 2, 2012
The Dept. of Health and Human Services' Center for Consumer Information and Insurance Oversight on Dec. 19 turned down a request by Michigan for an exemption to national health system reform law limits on health plan administrative spending.
The reform law requires individual market health plans to spend at least 80% of premiums on health care or quality improvement. Exemptions to the regulation are allowed if the rule is likely to destabilize the individual market and lead to fewer consumer health insurance choices.
Michigan asked HHS to lower the minimum medical loss ratio for local individual market plans to 65% for 2011, 70% for 2012, and 75% for 2013. HHS, in its response to the request, noted Michigan's application stated that "no companies have expressed intent to exit the state or to cease offering coverage in the individual health insurance market."
However, the application said the individual market already was stressed, noting that two insurers withdrew from the Michigan market in recent years for reasons unrelated to the health reform law regulations.
Michigan Insurance Commissioner Kevin Clinton said the insurance agency "is disappointed with HHS' decision to not allow Michigan's health insurers time to adjust to higher federal medical loss ratio standards."
Note: This item originally appeared at http://www.ama-assn.org/amednews/2012/01/02/gvbf0102.htm.
