Health reform implementation

Maine gets first state waiver from healthcare law provision

Maine health insurers are getting a temporary waiver from the health reform law’s requirement that they spend at least 80 percent of premiums on care, federal regulators decided Tuesday.

Maine is the first state to get a waiver. Three other states — New
Hampshire, Nevada and Kentucky — have pending waiver applications.

{mosads}The law requires plans in the individual market to meet an 80 percent medical loss ratio threshold or offer rebates to enrollees for the difference. The Maine Bureau of Insurance in December asked to retain its existing 65 percent ratio, arguing that a higher ratio would disrupt its market.

The Department of Health and Human Services agreed with those arguments in a letter sent Tuesday to Superintendent of Insurance Mila Kofman, a supporter of the law. The waiver is good for three years, but the last year is conditional on getting 2012 data that shows a continued need for the waiver.

The decision is “rooted in the particular circumstances of the Maine insurance market,” the letter reads.

Specifically, HHS points out that three insurers make up the bulk of Maine’s individual insurance market: Anthem Blue Cross Blue Shield of Maine (49 percent), MEGA Life and Health Insurance Company (37 percent) and HPHC Insurance Company (13 percent). MEGA had told Maine during preliminary discussions that it “would probably need to withdraw from this market if the minimum loss ratio requirement were increased.”

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