According to recent media reports, the U.S. Department of Health and Human Services (DHHS) has granted health insurance companies in Iowa extra time to comply with the health reform law’s medical-loss-ratio (MLR) rule, “but not as much time as the Iowa Insurance Division requested.” DHHS’ Center for Consumer Information and Oversight Director Steve Larsen, in a letter to the Iowa Insurance Division, laid out a timetable for compliance that calls for Iowa insurers to spend 67% of premiums on medical care this year, 75% in 2012, and 80% in 2013. 

Kentucky Insurance Commissioner Sharon P. Clark asked federal officials in February to cut the 80% requirement to 65% this year, 70% next year, and 75% in 2013.  However, DHHS on July 22 granted Kentucky only a one year concession under which the state’s insurance companies are required to spend at least 75% of premiums on medical services this year and 80% in 2012.

Also on July 22, North Dakota became the first state to be denied any medical loss ratio waiver on the basis of DHHS’ view that there did not appear to be any market destabilization in North Dakota.   So far these latest federal decisions bring to five the total number of states granted waivers for extensions of time to comply with the Affordable Care Act’s MLR rule, with Maine, Nevada, and New Hampshire having previously received such waivers.