Exemption from health care law requirements sought by growing number of states, businesses

President Obama’s health care legislation is facing challenges beyond Republican efforts at repealing and defunding. This week, Health and Human Services announced that it will grant Maine a three-year waiver on the requirement that insurers must spend 80-85 cents of every premium dollar on medical care and quality improvement.

According to Maine Insurance Superintendent Mila Kofman, the federal requirement would have caused one of Maine’s three major individual providers, MEGA Life, to completely withdraw from the market. This in turn would have completely destabilized the state’s entire individual market, with “costly ramifications” for 37% of the state’s individual market.

Maine already has a strained individual market marked by a lack of competition. Eliminating one of the three major providers would be devastating and send the market into disarray.

Maine has become the first state in the country to receive this waiver, although there is a growing backlog of other states which seek to follow suit, including Kentucky, Nevada, and New Hampshire. Clearly, these tumultuous effects will not be limited to just one state. 

These are not the first set of waivers allowed by the Obama Administration. HHS recently approved over 1000 waivers for employers that claimed the new provisions would be too costly to implement and would reduce access to coverage. 

One could argue that these waivers are essentially an admission that Obamacare is incompatible with private health insurance markets and with individual state health care plans. To institute a sweeping new law, only to reverse course and allow states to abstain from it because its effects will be devastating raises questions that voters will want answered before November of 2012.