By Jane Norman, CQ HealthBeat Associate Editor
December 21, 2011 – Democratic members of the Texas congressional delegation urged the Department of Health and Human Services to turn down a request from their state's insurance officials for a phase-in of medical loss ratio regulations.
"Once again, some in Texas are more interested in protecting insurance companies than protecting consumers," said the letter from Lloyd Doggett and seven other House members. "Granting this request would be a tremendous mistake and increase the cost of health care to consumers."
Under the health care law (PL 111-148, PL 111-152), insurers in the individual and small group market must spend at least 80 percent of the premiums they collect on health care and quality improvements. If they can't meet that standard, they will have to pay rebates to customers.
States, however, are allowed to ask for temporary "adjustments" so that insurers don't leave the market. The Texas Department of Insurance earlier this year asked to set its MLR standard at 71 percent for 2011, 74 percent in 2012 and 77 percent in 2013.
"After careful examination of the potential impact of the MLR requirement on the individual health insurance market in Texas, I have concluded that the immediate implementation of an 80 percent MLR is likely to stifle competition in the market and constrain many Texans' access to coverage," Mike Geeslin, Texas commissioner of insurance, wrote on July 28.
Doggett and others said, however, that immediate implementation of the 80 percent standard is necessary to make companies accountable and keep pressure on them to hold down premiums. They said in its submissions to HHS, that Texas failed to make the case for a phase-in of the MLR rule. And, they said, a survey by state officials found that 90 percent of insurers plan to stay in the market whether or not the standard is phased in.
HHS has not yet announced its decision on the Texas application but faces a deadline of Dec. 28, unless the agency extends the time.
Other Democrats signing the letter were Silverstre Reyes, Al Green, Rubén Hinojosa, Charlie Gonzalez, Gene Green, Eddie Bernice Johnson and Sheila Jackson Lee.