Update on Insurance Commissioner’s MLR Waiver Request

Last week, NCMS reported on Insurance Commissioner Wayne Goodwin’s request of the federal government to grant a statewide waiver from the Medical Loss Ratio (MLR) provision contained in the Patient Protection and Affordable Care Act of 2010 (ACA).  In the individual market the MLR provision of the ACA requires health plans to spend at least 80 percent of premium dollars collected on health care and quality initiatives, and 20 percent or less on administrative expenses. (Read more about the MLR by clicking here and here.) If granted, the waiver would allow health plans to meet a 72 percent medical loss ratio in 2011, with the percentage increasing incrementally each year until reaching 80 percent in 2014.

After having the opportunity to discuss the waiver request with the Commissioner and NC Department of Insurance staff, the NCMS understands that the Commissioner’s request was based on his concern that full implementation of the MLR this year could destabilize the health insurance marketplace in North Carolina. The NCMS does support limitations on the non-medical spending of health plans similar to those found in the MLR provision of the ACA. Due to time constraints and the sensitivity involved with such a request, the NCDOI told NCMS it was unable to consult with all affected stakeholders. However, the Commissioner acknowledged and understood the interest that physicians and patients have in ensuring that health plans are held accountable for how plans spend premium dollars.


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  • Implement the provision now. Let the stakeholders come to the commission.