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Health care waiver sought by Oklahoma officials

A health care waiver requested by Oklahoma Insurance Commissioner John Doak is now in the fact-gathering stage, according to the department.
BY ANDREW KNITTLE Published: October 11, 2011

A health care waiver request state officials say would benefit smaller insurance carriers and Oklahomans living in rural areas is now in the fact-gathering stage, according to Insurance Commissioner John Doak.

Doak, who announced the state was seeking the waiver last month, said it's under review by the U.S. Department of Health and Human Services. He said the federal agency sent a list of follow-up questions to his department and those are in the process of being researched.

The waiver is being sought to combat a key provision in the Patient Protection and Affordable Care Act, which mandates that 80 percent of individual and small group insurance premiums be spent on actual health care activities — not administrative costs, which can include commission payments to insurance agents. The concept in question is referred to as medical-loss ratio by industry professionals and elected officials.

Today, the standard medical-loss ratio is roughly 65 percent.

The waiver, which Doak formally requested on Aug. 30, would allow insurance companies operating in Oklahoma to phase in the changes incrementally over the course of three years, instead of all at once.

Doak said he believes the waiver request is warranted in Oklahoma, despite the fact that other states have had their pleas for more time rejected by the federal agency.

“If granted, the waiver would provide stability and sustainability of the individual insurance market during a period, 2011 to 2014, during which the rules have not been completely defined and confusion remains commonplace,” Doak said.

“I've reviewed the data received from the carriers and have listened to the producer community, which supports the waiver and concludes that the request would be beneficial to both the insurance industry and to consumers in Oklahoma.”

According the commissioner's office, U.S. Secretary of Health Kathleen Sebelius has 30 days to approve or reject the waiver request once it's deemed complete by her agency.

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Other states seek waiver

In addition to Oklahoma, 15 other states and the territory of Guam have requested a waiver on the looming medical-loss ratio changes. Maine, New Hampshire, Nevada, Kentucky and Iowa have all had waiver requests approved by the U.S. Department of Health and Human Services in recent months. Along with Oklahoma, Florida, Texas, Georgia, Indiana, North Carolina, Michigan, Kansas and Louisiana have requested the waiver but have yet to get a ruling. North Dakota and Delaware had requests rejected by the department. Federal officials determined that Guam's health care providers were in compliance with new medical-loss ratio standards, which mandate that 80 percent of individual and small group premiums to be used to provide medical care.


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