The state of Indiana is under fire from consumer advocates for requesting a perpetual waiver from a key provision of the healthcare reform law.
The law allows waivers for health plans to phase in the law's medical loss ratio requirement, which requires the plans to spend at least 80 percent of premiums on medical care or give consumers a rebate. Indiana is the only state so far to request that high-deductible health plans be exempted forever.
"Indiana's application is based on state politicians' ideological opposition to health reform, not the realities of the state's health care market," Consumer Watchdog wrote in public comments urging Health and Human Services Secretary Kathleen Sebelius to reject the application. "As the MLR regulations make clear, there must be a credible threat to the stability of the individual marketplace in order to grant a waiver. Indiana has demonstrated no such threat. We urge you to reject Indiana's application."
High-deductible healthcare plans are a growing segment of the insurance market because they offer employers one of the few options to clamp down on costs. According to the latest Kaiser Family Foundation annual employer health benefits survey, 17 percent of covered workers are enrolled in such plans this year, up from 8 percent two years ago.
Indiana has the fifth highest percentage of workers in such plans (8.1 percent of the population, or 365,000 people).
"In particular," the state's application points out, "73 percent of Indiana's nearly 29,000 state employees (excluding public university employees) participate" in such plans.
Consumer Watchdog points out that the plans can still meet their medical loss ration threshold simply by lowering premiums, and don't have to improve coverage and add costs to employers.
In its request, Indiana also asked for a phase-in for plans in the individual market until the 80 percent threshold is reached in 2015: 65 percent in 2011, 68.75 percent in 2012, 72.5 percent in 2013 and 76.25 percent in 2014.
The deadline for public comments was Saturday. HHS is expected to issue its decision within the month.