CU comments regarding Florida’s request for an adjustment to the medical loss ratio regulation


October 27, 2011
Via email to MLRAdjustments@hhs.gov to the:
Center for Consumer Information and Insurance Oversight
U.S. Department of Health and Human Services

Consumers Union Comments Regarding
Florida’s Request for an Adjustment to the Medical Loss Ratio Regulation

Consumers Union, the public policy division of Consumer Reports,(1) submits these comments to oppose the request for an adjustment (the “Request”) to the medical loss ratio (MLR) requirement for the State of Florida submitted by the Florida Office of Insurance Regulation (FOIR) to the Center for Consumer Information and Insurance Oversight (CCIIO). The FOIR seeks to phase in the MLR requirement using a 68% minimum standard in 2011, 72% in 2012, and 76% in 2013, and then reaching the Affordable Care Act (ACA) required minimum of 80% in 2014.
We urge CCIIO to reject Florida’s Request. Approval of the proposed adjustment will cause unnecessary financial harm to consumers. Based upon estimates from the FOIR of rebates with and without the requested adjustment, consumers could lose as much as an estimated $144 million in rebates during the proposed three-year transition period if the adjustment is granted. Many of these consumers have not been receiving value for their premium dollars and need immediate relief from escalating insurance costs.
Also, as an initial matter, we have serious concerns that the FOIR “investigation” into the potential impact of the MLR rule did not sufficiently consider the views of policyholders and consumer representatives, and was instead designed to promote the opinion of industry representatives and insurance agents who overwhelmingly supported an adjustment.
Adjustments to the MLR may be granted only if a state demonstrates that there is a “reasonable likelihood” that application of the requirement “may destabilize the individual market in the state.”(2)
For the complete comments, click here (PDF format).