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Update on the Medical Loss Ratio

In December 2011, we joined with Texas Well & Healthy to launch efforts to protect better care for Texas taxpayers. Our petition called on the U.S. Health and Human Services agency to deny the Texas Department of Insurance’s waiver request about the new medical-loss ratio rules. Under the Affordable Care Act (ACA), 80% of a company’s health care dollars are required to go towards health care rather than overhead; this is known as the “medical-loss ratio” provision of the bill. We support this provision, because we believe insurance companies should be spending more health care dollars on actual care and less on administration.

Within a week over 2,000 of you signed our petition to protect this sensible new requirement of the Affordable Care Act. Since you signed the petition, many state and federal Texas lawmakers have sent in their own letters in support of the medical-loss ratio provision of the ACA. To date, at least 9 Congressional Democrats from Texas and 31 State House Democrats have sent in letters to HHS urging them to reject the Texas Department of Insurance’s useless request. As we have written previously the changes proposed by requiring 80% of a company’s health care dollars to go towards care are will improve quality, affordable health care for millions of Texans.

We have reason to be hopeful. Recently, HHS denied a similar waiver request from the state of Florida. Our good friends at Progress Florida also petitioned against their state’s waiver request, and it got the attention of HHS. Many of the arguments mentioned in the petition paralleled arguments other groups and organizations made about protecting the existing MLR rules. In fact, the strength of the public comment from the petition was mentioned in the official letter HHS wrote explaining why they denied Florida’s request.

A group of 20 consumer and patient advocacy organizations additionally assert that the Florida Insurance Commissioner lacks authority under Florida law to submit a request for an adjustment to the MLR standard.

More than 3,000 Florida residents signed a petition requesting that the Secretary deny the Office’s request. The petitioners state that “implementation of the minimum loss ratio is long overdue in our state, and we urge you to put patients before insurance company profits by rejecting the state of Florida's attempt to delay this rule.”

Hopefully, our efforts in Texas will generate similar results. We are already very grateful for the leadership and support of those Texas elected officials who have stood beside us to protect better care, not bottom lines, on this critical issue. We will keep you up to date on any developments in the coming weeks. Meanwhile, visit the brand new Texas Well & Healthy website to keep up with the latest critical health care news in Texas.