Commentary: Louisiana Becomes Ninth State To Request Health Care Waiver
Number of States Demanding Exemption Hard Evidence that ObamaCare is Unsustainable
This Wednesday, Louisiana joined the growing ranks of states requesting a waiver from one of ObamaCare’s most pernicious regulations. Known as the “medical-loss-ratio” (MLR) regulation, this burdensome demand forces individual and small group insurers to allocate 80 percent of each premium to medical costs. This leaves only 20 percent of a premium for salaries, fraud prevention, advertising, etc.
The ramifications of this regulation for insurance providers and insurance markets will be severe. Under ObamaCare, violating the 80 percent minimum MLR will result in the insurer rebating the difference to policy holders. Many providers currently have MLR’s far lower than 80 percent, which will force them into rebates.
However, to do so will be enormously costly to providers. Such a steep financial price may ultimately force providers to drop out of the market altogether, taking away the policies of many people.
This was very nearly demonstrated in the first state to receive such a waiver, Maine. The MLR regulation would have thrown Maine’s insurance market into utter chaos, as one of the three major providers, MEGA Life, was set to completely withdraw unless a waiver was granted. Such an event would have caused 37 percent of the state’s individual market to lose their policies and would have destabilized the entire market.
Louisiana’s formal waiver request from Insurance Commissioner Jim Donelon addresses these concerns directly:
“These provisions will, if implemented as written, be disruptive and detrimental to Louisiana’s market. As currently proposed, implementing the 80 percent loss ratio in the individual market will act to decrease consumer choice, make coverage more expensive and less readily available, and work to drive valuable trained producers out of the market just when they are needed most.”
With the addition of Louisiana, nine states have now requested an exemption from this particular stipulation. So far, only Maine has been granted a waiver, but the growing dissatisfaction amongst states means the Obama Administration will face some difficult decisions.
The fact that states must opt out of the health care plan’s tenets is hard evidence that ObamaCare does not and will not work. With Obamacare’s tenuous hold steadily crumbling, one can only hope that the growing chorus for waivers will lead our legislators towards a repeal of this catastrophic law.