HHS rejects looser insurance rules in two states

The Health and Human Services Department on Wednesday denied two more states' requests to soften new rules that govern insurers' spending.

HHS denied Kansas's and Oklahoma's requests for adjustment to the healthcare law's medical loss ratio (MLR) provisions. The law requires insurers selling policies to individuals to spend 80 percent of their premiums on medical costs, with the remaining 20 percent for profit and administrative costs.

HHS has rejected MLR adjustments in eight states and approved them in six.

Republican governors have asked for adjustments more often than their Democratic counterparts. Of the eight requests HHS has denied, seven came from GOP-led states and one from a Democratic governor. The department has approved requests from four Republicans and two Democrats.

The healthcare law allows HHS to set an adjusted MLR in states where implementing the 80 percent standard immediately would drive insurers out of the state and undermine consumers' access to insurance. HHS said it was not convinced that insurers would leave the markets in Oklahoma and Kansas.

Oklahoma had asked for a 70 percent standard in 2012, which would increase to 75 percent in 2013. All plans in all states must meet an 80 percent MLR by 2014.

Kansas wanted a 73 percent MLR this year and 76 percent in 2013.