A New Twist

Maine Receives Waiver

Yesterday, the federal government granted the State of Maine a waiver on one of the controversial components of Health Care Reform.  In the letter from HHS to the State, Maine was given a 3 year reprieve on the medical loss ratio requirement that took effect January 1, 2011.

In this provision of the law, health insurers are required to spend 80 to 85% of every premium dollar on medical services.  The insurers in Maine instead are required to spend 65% on medical services.

Why did this happen?  Maine does not have many insurance companies writing health insurance.  Mega Life who has 37% of the individual market place insured rumbled that they might withdraw from the marketplace if held to these loss ratio requirements.

Other states including Kentucky, Nevada and New Hampshire have filed similar waiver requests with HHS.

Why the 3 year waiver?  The expectation that when the health insurance exchanges are operational in each State throughout the country beginning in 2014, new affordable options for health insurance will exist.  Who will be these insurance companies to provide more affordable options within the exchange?

More must be done to ensure a system of affordable health care.