Additionally, the Health and Human Services Department (HHS) has decided to let two more states — Nevada and New Hampshire — phase in healthcare reform rules that govern insurers’ spending.
According to a press release, as of the end of April 2011, a total of 1372 one-year waivers have been granted, including the 221 new approvals.
The Hill notes that the new healthcare law requires health plans in the individual market to spend 80% of their premium revenues on medical costs, though states can request an adjustment if they determine that immediately implementing the new limits would drive insurers out of the state and disrupt consumers’ access to care. The Hill reports that New Hampshire had asked to set the ratio at 70% for the next three years, and that HHS approved a gradual transition of 72% this year and 75% in 2012. The state’s insurers will have to meet the federally mandated threshold in 2013.
Nevada had requested a one-year adjustment from 80% to 72%. HHS granted the one-year modification, but at 75%. Two of the state’s biggest insurers might have left the market if they had to meet the 80% standard immediately HHS said, according to the report, potentially leaving more than 20,000 people without coverage.
HHS has now granted three adjustments to the new rules. It previously accepted Maine’s request for a modified standard (see Maine Granted Waiver of Key Provision of Health Care Law).
The Department of Health and Human Services (HHS) notes that of all the waivers granted to date, the vast majority – more than 95% – were granted to health plans that are employment-related, including self-insured employer health plans, health reimbursement arrangements, collectively-bargained multi-employer plans, and health plans sold by issuers to fully-insured employers. Moreover, it states that the number of enrollees in plans with annual limits waivers is 3.1 million, representing less than 2% of all Americans who have private health insurance today.
Broken down by category, HHS noted that the 1,372 waivers had been granted to:
- Self-Insured Employers (528)
- Health Reimbursement Arrangements (457)
- Multi-Employer Plans (315)
- Non-Taft Hartley Union Plans (27)
- Health Insurance Issuers (39)
- State-Mandated Policies (4)
- Association Plans (2)
Mini-med plans have lower limits than allowed under the Affordable Care Act and, according to HHS, while mini-med plans do not provide security in the event of serious illness or accident, they are unfortunately the only option that some employers offer. “In order to protect coverage for these workers, regulations allow these plans to apply for temporary waivers from rules restricting the size of annual limits to some group health plans and health insurance issuers,” HHS noted. Those waivers only last for one year and are only available if the plan certifies that a waiver is necessary to prevent either a large increase in premiums or a significant decrease in access to coverage. In addition, HHS said that enrollees must be informed that their plan does not meet the requirements of the Affordable Care Act.
More information on the waivers is available at http://cciio.cms.gov/resources/files/approved_applications_for_waiver.html