If Georgia is successful in its request for a waiver from the medical-loss ratio, insurers in the state will be exempted from spending 80 to 85 percent of premiums on direct care for patients.
Insurance Commissioner Ralph Hudgens said he wants the MLR waiver for 2011, 2012 and 2013, reports the Insurance Journal. In a letter to HHS, he said the waiver will help avoid destabilizing the insurance market in Georgia, according to the Macon Telegraph. "Many thousands of Georgians will lose their current insurance coverage as smaller insurers make difficult decisions to exit the individual market rather than to continue in it at a loss," he wrote in the letter.
Hudgens said the purpose of Georgia's request for an MLR waiver is three-fold. First, it is imperative that the state "do no harm" to residents with health issues who are currently insured in the individual market. Second, the MLR's phase-in period provides insurers time to adjust their business models to compete in the proposed federal system should it be deemed constitutional. Third, the wavier will help preserve consumer access to agents or brokers.
Although he believes the health reform law is unconstitutional and supports the lawsuits challenging the new rules, Hudgens said he is filing the waiver request because the law is still intact and he wants to protect Georgia residents and the state's insurance market, notes the Insurance Journal.
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