Some healthcare waiver requests denied even as HHS approves 500 others

By Jason Millman - 01/27/11 10:43 AM ET

While some 500 groups got waivers for a healthcare reform provision setting annual coverage requirements, about 50 requests for such exemptions were denied, the Department of Health and Human Services told The Hill Thursday.

A week after Republicans announced an investigation into reform law waivers, HHS made public on Wednesday new waivers for more than 500 groups that would not be able to meet the reform law's new requirement for annual coverage limits in 2011.

The law gives HHS Secretary Kathleen Sebelius the flexibility to grant waivers to avoid disruption in the insurance market, but Republicans say the waivers are either gifts to Democratic allies in unions or proof that the reform law isn’t working. A large number of businesses have also received waivers.

The waivers are typically granted to so-called "mini-med" plans that offer limited annual coverage — as low as $2,000 — to employees. The waivers are designed to preserve stability in the insurance market until new state-run insurance exchanges open in 2014.

Dozens of applicants were denied waiver requests because they "did not demonstrate that compliance with the minimum annual limits requirements would significantly increase premiums or decrease access to benefits," an HHS spokeswoman said.

The latest round of approvals bumped the number of waivers from 222 to 729. However, the number of individuals covered by the waivers rose from 1.5 million to just 2.1 million. HHS said it was anticipating the bump because plans were required to file the waiver request before the plan year starts — Jan. 1 for many.

Republicans on the powerful House Energy and Commerce Committee last week asked HHS to disclosed detailed information on waiver requests. HHS said Wednesday night that the waiver process has been transparent.

"We are committed to making the waiver process transparent to the public and to make sure workers with mini-med plans are informed about the limited nature of their coverage," Steve Larsen, director of oversight in HHS's Office of Consumer Information and Insurance, said in a statement.