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Florida wants waiver from medical-loss ratio law

Insurance companies operating in Florida may get a reprieve from the medical-loss ratio requirements as the state Office of Insurance Regulation plans to ask the federal government for a waiver for additional time to meet restrictions on how they spend premium dollars.

The insurance department has expressed concern that the ratios, which require insurers to spend 80 to 85 percent of premium revenue on medical expenses, could destabilize the marketplace because smaller companies might not be able to meet the requirement, according to the Orlando Business Journal.

While some critics say Florida would be depriving many residents of rebates, Insurance Commissioner Kevin McCarty argues that in seeking a waiver he's actually helping them keep their coverage. The abrupt rule change would likely lead to insurers shutting down those lines of business or leaving the state, reports Health News Florida.

Florida currently requires insurers to operate at 65 to 70 percent loss ratios. Pressed by the insurance industry, state regulators will request a reprieve from the requirements until 2014, reports the St. Petersburg Times. If that isn't acceptable, the Orlando Business Journal reports that Florida would ask that the rule be phased in over three years so companies have time to adjust.

One company that would be hit hard by the new spending rules is UnitedHealth's Golden Rule subsidiary, which specializes in sales to persons who do not have coverage through an employer. If the new rules had been in effect last year, Golden Rule would have had to rebate about $38 million to its 120,000 customers in Florida, notes Health News Florida.

To learn more:
- read the Orlando Business Journal article
- read the St. Petersburg Times piece
- see the Health News Florida story

Related Articles:
Maine seeks waiver from medical-loss ratio requirements
NAIC ponders medical-loss ratios while Ohio plans balk at new non-medical expenses
Medical-loss ratios: Rockefeller jumps into fray; Insurers could abandon markets

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