On October 25th, the Wisconsin Office of the Commissioner of Insurance (OCI) requested an exemption from the federal government that could ultimately leave consumers in Wisconsin with fewer protections and slow down an increase of quality in their care. In a letter addressed to the Department of Health and Human Services (HHS) Secretary, Kathleen Sebelius, Insurance Commissioner Theodore Nickel requested an exemption that would allow insurers to spend less money on consumers and more on profits.
Let’s back up to when it all started – the passage of the new healthcare law in March of 2010. The Affordable Care Act (ACA) improved the healthcare system for consumers in terms of affordability, access and transparency. An ACA provision, referred to as, “medical loss ratio” requires insurers to spend at least 80% of consumer’s premiums on direct medical care, limiting the amount that goes towards administration, marketing and profits. If the company fails to meet the 80% minimum they are required to provide their customers with rebates.
In Wisconsin, only six insurance companies currently do not meet this 80% minimum, however, OCI and the Walker Administration requested exemptions anyway, stating that the new regulation could result in over $4 million in rebates, this year, and more in subsequent years. OCI is requesting to “phase in” the minimums – starting at 71% and increasing 3% each year until reaching the 80% mark.
The Wisconsin Alliance for Women’s Health supports the new consumer protections, including the Medical Loss Ratio provision, under the Affordable Care Act. Wisconsinites cannot wait the approximately three years OCI is requesting to be given more protections and services for the premiums they pay. By encouraging more consumer money be spent on direct care, we will be working to improve the quality of care that individuals receive now. While we hoped that OCI would work to encourage consumer protections as well, their recent letter to HHS requesting more protections for insurance companies proves otherwise.