Michigan Consumers for Healthcare, a coalition of 80 nonprofit advocacy and provider groups, is asking Medicare to deny Michigan?s request to delay a federal regulation that would require health insurers to pay 80 percent of premiums to providers.
The health care coalition says the state?s waiver application to the U.S. Department of Health and Human Services would cost consumers $53 million, or $164 per person.
?The current administration has essentially decided that the commercial insurance industry needs the consumer?s hard-earned money more than the consumer does,? said Don Hazaert, the coalition?s director.
Michigan Consumers includes the Area Agencies on Aging of Michigan, the Greater Detroit Area Health Council, the Detroit Wayne County Health Authority and the American Heart Association.
In July, Michigan Insurance Commissioner R. Kevin Clinton asked the federal government for a three-year phase-in of a requirement that health insurers pay providers 80 percent of premiums this year or reimburse individual policyholders the difference in 2012.
Under the 80 percent ?medical loss ratio? requirement ? that only applies to the individual insurance market ? Clinton said 14 health insurers would be required to issue rebates totaling $30.6 million.
Those 14 insurers include eight that would pay rebates in excess of their after-tax profits for 2010, Clinton said.
Under the Patient Protection and Affordable Care Act of 2010, states are allowed to ask the HHS secretary to adjust the medical loss ratio if ?the standard may destabilize the individual market? and ?could result in fewer choices for consumers.?
Based on a federal analysis, HHS said 9 million insured people could be eligible for rebates worth up to $1.4 billion starting in 2012.
The reform law also requires health insurers to publicly report their medical loss ratios. The Michigan Office of Financial and Insurance Regulation has a list of health insurers? medical loss ratios.
Michigan only requires health insurers to pay 65 percent of premiums to providers for policies rated by age and 55 percent for other policies. Some plans, including Blue Care Network, are already below the 80 percent medical loss ratio.
For more information, visit www.consumersforhealthcare.org.
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