Rick Young Insurance's Blog

Last year, the Affordable Care act required insurers to keep a Medical Loss Ratio of 80-85 percent depending on the plan. But the requirement could be destructive, even to Insurance Companies in Michigan.

The Affordable Care Act does allow states to be granted waivers by the Health and Human Services, if they can prove that the Medical Loss Ratio requirement would hurt their market. But this is not achieved easily:

• 15 states have requested Medical Loss Ratio requirement waivers from the Health and Human Services, but only one of those waivers was approved.
• 5 states were given limited approval and 6 were flat out rejected.
• 3 states are left waiting for a decision.

The requirement could damage insurers by trying to interfere with how they do their business. It is likely to limit the flexibility of business strategies. In similar requirements in the past, insurers left the business, and it could happen again. It's important that Insurance Companies in Michigan aren't hurt by requirements that aren't needed.