For your information, a copy of the letter sent today from the U.S. Center for Medicare and Medicaid Services to the Iowa Insurance Commissioner is available
here.
As described in the letter, the federal government has approved Iowa’s request for a waiver from the medical loss ratio requirements of the Affordable Care Act of 2010.
The new health care law basically requires states to change the requirement of plans in their states to spend more money on care and less on administration and reserves. As a practical matter, it could run small carriers out of the state. The potential market disruption has led a number of states to seek waivers of the medical loss ratio requirement until 2014. Maine and New Hampshire already have waivers. Today North Dakota was turned down. Kentucky was effectively turned down, as well. Iowa was partially approved.
Here is a comment from Sen. Grassley:
“The purpose of this waiver is to allow Iowa to have different medical loss ratios for insurers than would have been required under the health care overhaul enacted last year. Without this waiver, because of the mandates in the new law, insurers likely would have left the state, leaving Iowans with fewer health coverage options. The need for this kind of waiver emphasizes that it should be up to states to regulate their insurance markets. The 2010 health care needs to be repealed and replaced with policies that allow coverage that fits the needs of different marketplaces.”
A fact sheet from the Centers for Medicare and Medicaid Services is available
here.
