In a letter to the Texas Department of Insurance, the Department of Health and Human Services has rejected the Lone Star state's request for an exemption from the medical loss ratio requirements of the Affordable Care Act (ACA).
The ACA states that insurers must spend 80% of the premiums they collect on actual health services. States may request a waiver from the medical loss ratio rule if it would "destabilize the individual market" of that state. If insurers do not meet the requirement, they must pay the difference in rebates to their customers.
According to HHS:
[HHS has] determined that the evidence presented does not establish a reasonable likelihood that the application of an 80 percent MLR standard will destabilize Texas’ individual market. Consequently, we have determined not to adjust the MLR standard in Texas’ individual market and, thereby, ensure that consumers receive the benefit of this provision of the Affordable Care Act.
This promises to return $260 million to Texas consumers over three years. Other states have also attempted to obtain MLR waivers as part of a strategy by Republican leaders to eliminate and weaken the MLR provisions. In Florida, where HHS also recent rejected a waiver request ensuring consumer rebates in that state $145 million, Gov. Rick Scott twice tried to rip off consumers in his state on behalf of insurance companies.
The rejection of Texas's waiver request is a resounding victory for health insurance customers and a terrific example of the many consumer protections provided by the ACA.