Texas House Members Object To Medical Loss Ratio Waiver Request

A group of lawmakers in Texas are urging the state’s insurance commissioner to withdraw a request for a waiver to the medical loss ratio (MLR) provision in the federal health insurance reform law. They say the request would cost Texas policy holders an estimated $260 million.

State Rep. Lon Burnam and 30 other state representatives want Texas Department of Insurance (TDI) Commissioner Eleanor Kitzman to withdraw the waiver application to application to the U.S. Department of Health and Human Services (USHHS).

The MLR rule is a provision of the Affordable Healthcare Act that would require insurance companies to spend at least 80 percent of policy premium dollars on actual medical expenses, rather than in-house overhead, marketing, advertising, or bonuses. Under the MLR, if insurers fail to comply with these standards, they must provide rebates to policyholders. In Texas, rebates would amount to approximately $350 for each policy holder.

“I can see no reason why the state of Texas would want to delay a measure that would save Texans money,” said Rep. Burnam in an announcement released by the Texas House of Representatives. “After a session in which budget writers slashed funding for essential public health services, Texans need all the help they can get to cover their medical expenses.”

Burnam added that several health insurers in Texas are meeting the new MLR requirement. That fact “demonstrates that the standard is clearly achievable,” he said.

“I would urge all North Texans to contact TDI Commissioner Kitzman at (512) 463-6464 and encourage her to withdraw her request to delay full implementation of the MLR rule,” Burnam said.

To date, USHHS has denied MLR delay applications from Indiana and Louisiana.

The National Association of Insurance Commissioners sent a resolution to USHHS asking that the MLR be modified. Agent groups and many commissioners believe that the MLR restriction will reduce agent commissions. That in turn will hurt consumers by cutting agents out of the process of securing health insurance, especially on the individual level, they say.

Editor’s Note: Burnam is a socialist (Democrat)

 

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