Texas will not receive healthcare waiver

The Health and Human Services Department on Friday denied Texas's request for an adjustment to new rules under the healthcare reform law that govern insurers' spending.

The law says policies sold to individuals must spend 80 percent of their premiums on medical costs, leaving the other 20 percent for administrative costs and profit. HHS denied Texas's request to phase in that standard over three years.

HHS has now denied nine states' requests for adjustments, and approved six.

The healthcare law allows HHS to adjust the spending rules — known as the medical loss ratio — in states where immediately implementing the 80 percent standard would drive insurers out of the market and leave consumers with fewer options.

But HHS determined that almost all of the insurers in Texas's individual market either already meet the 80 percent threshold or have said they don't plan to leave the state once it's imposed.

Texas had asked HHS to apply a 74 percent medical loss ratio this year, followed by 77 percent next year. All plans in all states must be at 80 percent in 2014. Plans that fall short of the spending requirements will have to pay rebates to their customers.