Health insurers in Kansas and Oklahoma can’t take more than 20 percent of the revenue they collect in premiums for overhead and profit, after the U.S. today denied requests from the states for more generous limits.
In addition to those states, the government has rejected requests by six others for waivers from the Medical Loss Ratio provision in the Patient Protection and Affordable Care Act. This provision requires insurance companies to spend at least 80 percent of premium revenue on care. Seventeen states have asked for an adjustment to the requirement that would allow their insurers to spend less.
According to the Center for Consumer Information and Insurance Oversight, Kansas and Oklahoma don’t need an adjustment because insurers probably won’t leave the states without it.
Kansas’ insurnce commissioner agrees. Sandy Praeger told reporters she submitted the waiver request in April, before it was clear whether insurers in her state could meet the requirement.
Oklahoma’s insurance commissioner is not as satisfied with the ruling. In a statement, John Doak wrote: “This decision could lead to a massive disruption of our insurance markets.” Smaller insurers in the state may comply with the requirement by firing employees, he said. Read More