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Oklahoma loses bid for insurance company relief under health care law

Obama administration rejects Oklahoma Insurance Commissioner's request to lower the ratio that some companies must spend on health care claims rather than overhead and profit
BY CHRIS CASTEEL Published: January 5, 2012
/articleid/3637578/1/pictures/1603723">Photo - Oklahoma Insurance Commissioner John D. Doak <strong>PAUL B. SOUTHERLAND</strong>
Oklahoma Insurance Commissioner John D. Doak PAUL B. SOUTHERLAND

Doak's application asked that the ratio for insurers in the individual market be 65 percent for 2011, 70 percent for 2012 and 75 percent for 2013.

The Health and Human Services Department determined that two companies, Aetna and Humana, met the 80 percent threshold in 2010 and that six others intended to adapt to the standard or would be sufficiently profitable to issue rebates under the standard.

“Based on this, we do not expect any issuers to withdraw from the Oklahoma individual market,” the department said.

If the companies' ratios for 2011 are similar to those in 2010, six companies would owe about $16 million in rebates to their customers. Golden Rule and Health Care Service Corp. would have the largest obligations, according to the Health and Human Services Department.

Doak said Wednesday that some of the companies might have to comply with the standard by reducing their workforce and some might leave the market.

“Simply put, competition is good for consumers and these MLR requirements could very well reduce competition in Oklahoma's insurance markets,” he said.

Oklahoma's congressional delegation wrote a letter to the federal department supporting Doak's position, but consumer groups and the Oklahoma Policy Institute opposed the state's request.


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