Georgia Allowed to Phase-In Healthcare Law’s Medical Loss Ratio

Health insurers in Georgia have been granted a waiver to a new federal requirement that they spend certain minimums on patient care and quality.

U.S. officials on Tuesday announced that Georgia is the eighth state to get such an exemption from what is known as the medical loss ratio (MLR).

The MLR is a provision in the federal Affordable Care Act that requires insurers to spend at least 80 percent of the premiums they collect on care-related costs for individual and small-group insurance. The aim is to discourage excess profits or heavy spending on big salaries.

States can apply for waivers if they worry that insurers will react by leaving the market.

The Georgia Department of Insurance asked that the rule be phased in for Georgia, starting at a lower 65 percent the first year. U.S. officials compromised, setting the standard at 70 percent this year.

Federal officials granted a full waver to Maine and denied waivers to North Dakota and Delaware. New Hampshire, Nevada, Kentucky and Iowa are being allowed to phase-in the MLR rule similar to Georgia.