Washington, DC – The U.S. Department of Health and Human Services on Friday largely declined a waiver requested by the Commonwealth of Kentucky for adjustment to the Medical Loss Ratio Standard. Kentucky had asked for regulatory flexibility from some of the new health care law’s requirements for 2011 through 2014 to prevent health insurance plans from leaving the state.  While the Department of Health and Human Services acknowledged that the law “may risk destabilizing the Kentucky individual market” and could leave “more than 22,000 enrollees temporarily without coverage”, the agency provided only a fraction of the regulatory relief Kentucky sought. 

“The Administration has yet again turned a blind eye to heavy handed regulations that are driving up health care costs, reducing competition, and preventing Kentuckians from keeping the health plans they have,” Senator Mitch McConnell said. “Rather than cherry-picking the thousands of pages of regulations and arbitrarily waiving some of the rules for some people in some circumstances, we ought to repeal this unpopular law and replace it with the types of commonsense health reforms that lower costs and Americans support.”

Medical Loss Ratio (MLR) is the fraction of revenue from a plan's premiums that goes to pay for patient medical services.  This is traditionally regulated by state departments of insurance, but President Obama’s new health spending law now sets new federal requirements that states must comply with.