Insurers in US territories get O-Care exemptions

The Department of Health and Human Services has exempted health insurers in U.S. territories from a slew of requirements under ObamaCare.

In a Wednesday letter, HHS said the insurance companies in the territories do not have to follow certain marketplace requirements because they are not considered “states.”

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“After a careful review of this situation and the relevant statutory language, HHS has determined that the new provisions ... are appropriately governed by the definition of ‘state,’ ” said the department. “[T]hese new provisions do not apply to individual or group health insurance issuers in the U.S. territories.”

Insurance companies in Puerto Rico, Guam, American Samoa, the U.S. Virgin Islands and the Northern Mariana Islands are no longer required to implement a number of ObamaCare measures such as the community rating system, a single-risk pool, the medical loss ratio or guaranteed benefits.

Insurers in the territories have argued the requirements put an undue burden on them because residents are not mandated to get coverage and do not receive government subsidies.

Until now, HHS refused to grant an exception, arguing it did not have the authority to do so.

Under the healthcare law, insurance companies have to meet certain requirements, such as implementing a single-risk pool so insurers can’t charge higher premiums to high-risk patients. Insurers said the measures hurt their bottom line. 

The department said the Centers for Medicare and Medicaid Services would update regulations to make sure they comply with the department’s interpretation.