Two Health Insurers Leave Florida, Citing Health Law Regulations

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Two tiny health insurance companies are exiting Florida's individual market because of Democrats' health law, the state's insurance department announced Thursday in an effort to bolster its request for a waiver.

Florida has asked for a waiver from the medical loss ratio requirement that says insurers must spend at least 80 percent of premiums on medical care or give customers rebates. Several consumer advocacy groups argued Thursday that the state doesn't need such a waiver.

"On October 24, 2011 the Office received notification from American Enterprise Group Inc. that two of its subsidiaries will 'exit the state' for the purposes of individually underwritten comprehensive major medical business," the Florida Office of Insurance Regulation said in a statement. "In a letter to the Office, American Enterprise specifically cites a 'change in the regulatory environment' including the Affordable Care Act’s imposition of the minimum medical loss ratios (MLR) as reasons for this decision."

American Enterprise Group's withdrawal isn't limited to Florida. 

The Iowa-based company announced last week that it's exiting the individual major medical insurance market nationwide, the Des Moines Register reported. The company said most of its 35,000 policyholders nationwide would have the option of continuing their coverage through a company called Celtic Health Insurance, the paper reported.

The two subsidiaries that are pulling out of Florida — American Republic Insurance Co. and World Insurance Co. — underwrite 2,615 policies in the state, according to the Florida Office of Insurance Regulation. That's about one-third of 1 percent of the 800,000 or so individual policies issued in Florida, according to the state's waiver petition.

Florida has asked the federal Department of Health and Human Services for permission to phase in the medical loss ratio over three years: 68 percent for 2011, 72 percent for 2012 and 76 percent for 2013. Public comments on the waiver request were due Thursday.

The liberal group Health Care for America Now used the opportunity to request that HHS hold a hearing on the request to highlight its "serious defects." And the advocacy group Consumer Watchdog urged HHS to reject the waiver because the state has "19 listed individual-policy providers doing business and a wide range of choices for individual insurance."

"The fact that most insurance companies do not like the medical loss ratio requirement of the Affordable Care Act does not mean that they are incapable of complying with it," the group wrote in a letter to Sebelius. "Neither does the fact that some insurance companies will have to accept reduced profits in order to meet the standard."

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