Below is a Texas Department of Insurance press release:
In denying Texas’ application, HHS stated that it took into account each carrier’s MLR and profitability in making its decision and asserted that few issuers are reasonably likely to exit the individual market in Texas.
The Department’s application clearly showed otherwise.
Of the 34 Texas carriers subject to the law, 23 will pay rebates based on 2010 data; at the 80 percent MLR threshold, these rebates will absorb the net underwriting profit for the entire individual market.
HHS’ decision does not allow sufficient time for carriers to adjust their operating models, nor does it contemplate the effects on small and mid-level carriers that lack the resources and administrative economies of scale to compete in the individual market under PPACA.
A reasonable, responsible phased-in approach would still have afforded rebates to Texas consumers without risking disruption, dislocation and withdrawal of carriers in the individual market. The Department will continue to work to ensure the availability of high-quality, high-value health insurance to this important underserved segment of the market.
For more information contact: PIO@tdi.state.tx.us
Editor’s Note: Health insurance companies are in business to earn a profit. Government dictates on profit margins a company may earn is un-American.