North Dakota denied MLR waiver; Iowa, Kentucky approved

Insurers operating in North Dakota were dealt a disappointing blow when the U.S. Department of Health & Human Services (HHS) denied the state's request to delay implementation of the medical-loss ratio (MLR).

Federal regulators determined that North Dakota's three large health insurance companies are already meeting or close to meeting the MLR threshold and, therefore, are not at risk of leaving the market, The Hill's Healthwatch reports. Data for six companies showed three were already meeting the 80 percent requirement and two others expect to meet that goal within two years, according to the Bismark Tribune.

"The bottom line is the market is in good shape," said Steve Larsen, director of the Center for Consumer Information and Insurance Oversight.

In an attempt to attract new companies to the market, North Dakota currently only requires its health insurers to spend 55 percent of premiums on claims. Hoping to continue drawing health insurers, the state's insurance department asked HHS to approve a phase-in period for MLR requirements, beginning with requiring health plans to spend 65 percent of their premiums on claims in 2011, 70 percent in 2012, and 75 percent in 2013, notes the Tribune.

Meanwhile, HHS awarded Iowa and Kentucky with MLR waivers, although it altered parts of both states' requests.

Iowa wanted to allow insurers to spend 60 percent of premiums on healthcare in 2011, 70 percent in 2012 and 75 percent in 2013. Although HHS agreed that implementing the 80 percent MLR standard this year might destabilize the state's individual health market, it didn't think the complete phase-in adjustment was necessary. Instead, HHS told Iowa that health insurers must maintain medical-loss ratios of 67 percent in 2011, 75 percent in 2012, and then come into full compliance with the 80 percent standard by 2013, reports the Des Moines Register.

Kentucky similarly asked for a slow implementation period, beginning with 65 percent this year, 70 percent next year and 75 percent in 2013, but HHS only granted the state a one-year break. Health plans must spend at least 75 percent of premiums on healthcare this year and 80 percent in 2012, the Louisville Courier-Journal notes.

To learn more:
- see the Bismark Tribune article
- read The Hill's Healthwatch story
- check out the Des Moines Register piece
- see the Louisville Courier-Journal story

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