Feds delay healthcare insurance provision in Georgia

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The federal government has agreed to allow Insurance Commissioner Ralph Hudgens to delay for three years the implementation of a key part of the healthcare reform act.

The Department of Health and Human Services (HHS) said Tuesday it has granted a waiver requested by Hudgens on the medical loss ratio standard included in the Patient Protection and Affordable Care Act signed last year by President Barack Obama.

That provision requires health insurers to spend at least 80 percent of their premium dollars on medical care rather than on marketing and administrative expenses, a requirement that is supported by consumer organizations.  Companies that don’t meet the 80 percent target must provide rebates to consumers.

The HHS waiver granted to Hudgens means that the 80 percent loss ratio requirement will be phased in more slowly in Georgia.

“I didn’t ask HHS to do away with the requirement entirely, I just asked for it to be phased in over a three-year period,” Hudgens said. “I am pleased that HHS agrees with my concern.”

Hudgens contended that implementing the 80 percent requirement now “would destabilize the individual market in Georgia, and consequently many Georgians would be harmed in the process.”

Hudgens requested that the medical loss ratio be moved up to 65 percent this year, 70 percent in 2012 and 75 percent in 2013, with the full 80 percent requirement not taking effect until 2014.

The HHS waiver will require a 70 percent loss ratio for insurers this year, a 75 percent ratio in 2012 and the full 80 percent requirement in 2013.

Cindy Zeldin of Georgians for a Healthy Future, one of the organizations that supports the 80 percent requirement, called the HHS decision a “reasonable compromise.”

© 2011 by The Georgia Report

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Tags: Cindy Zeldin , healthcare reform act , medical loss ratio , Ralph Hudgens , waiver of 80 percent requirement