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Maine Becomes First State to Request Obamacare Waiver

The Department of Health and Human Services (HHS) just posted Maine's application for an "adjustment" (waiver) from Obamacare's Medical Loss Ratio (MLR) requirement. State insurance commissioners have warned the Obama administration that Obamacare's MLR requirement has the potential to destabilize insurance markets.1 In fact, HHS expects 20 states to apply for the waiver. So far, Alabama, Alaska, Florida, Georgia, Iowa, Louisiana, Mississippi, Nevada, Oklahoma, South Carolina, and West Virginia have either said they will also seek a waiver or are leaning towards doing so.2

Under the MLR insurers in the individual market must spend at least 80 percent of premiums on health benefits. Maine is asking for a reduction of that rate to their state standard of 65% with the understanding that, unlike the federal standard, their state standard does not factor in quality improvement activities or taxes.

While we are glad to see that HHS is working with the states to keep companies from going out of business, we are concerned that HHS has this much power.

1 Letter from State Insurance Commissioners (NAIC) to Kathleen Sebelius, Secretary of Health and Human Services (October 27, 2010), available at http://www.naic.org/documents/committees_ex_mlr_reg_asadopted.pdf.
2 Sarah Kliff and Jennifer Haberkorn, States file early innovator applications; Utah says 'no thanks' ... Grassley still fighting with Reid on reform negotiations ... Planned Parenthood takes on 'Gossip Girl' in latest campaign ... PULSE, POLITICO PULSE, Dec. 23, 2010, http://www.politico.com/politicopulse/1210/politicopulse403.html.