HHS rejects Michigan’s request for MLR adjustment

The Health and Human Services Department on Monday denied a sixth states request for an adjustment to certain rules under the new healthcare law.

HHS rejected Michigans request for an adjustment to the laws medical loss ratio (MLR) requirements. The law requires insurance plans for individuals to meet an 80 percent MLR, meaning they must spend 80 percent of their premiums on medical costs. Only the remaining 20 percent can go toward profits and administrative costs.

Michigan had asked HHS to gradually phase in that standard over the next three years. But the department said Monday that most insurers in the state are either profitable enough to meet the 80 percent standard immediately or are adjusting their business practices to get there.

HHS has now denied six states requests for MLR adjustments — Delaware, Florida, Indiana, Louisiana, Michigan and North Dakota. It has approved modified standards in another six states.

The healthcare law allows HHS to phase in the 80 percent MLR in states where implementing it immediately would undermine consumers access to healthcare coverage.

Five more requests are still pending.