By Sam Baker - 09/12/11 04:37 PM EDT
The department denied Delaware's application for an adjustment to new rules that govern how much insurers spend on medical care. Plans must spend 80 percent of their premiums on health costs, leaving the other 20 percent for profit and administrative expenses.
Delaware asked HHS to phase in the 80 percent standard over the next three years. The healthcare law allows states to ask for adjustments if they believe applying the new limits immediately would destabilize their individual insurance markets.
It's only the second outright rejection HHS has issued. The department previously denied North Dakota's request for an adjustment. HHS also denied Guam's request, but it did so because Guam's insurance plans are so small that they don't have to comply with the new rules.
HHS has granted adjustment request from five states, though in almost every case it was slightly modified the specific levels the state requested.
Georgia will likely be the next state to hear a decision from HHS. Public comments on the state's request are due Sept. 19. The department is reviewing another eight applications to see whether they're complete.