Texas Dems drag Perry into fight over health waiver request

Texas congressional Democrats are slamming presidential candidate Rick Perry, governor of Texas, over his administration’s request for a waiver from the healthcare reform law.

Texas House Democrats sent a letter to Health and Human Services Secretary Kathleen Sebelius Wednesday urging her to reject the state’s request that insurers be allowed to spend a larger portion of premiums on profits and overhead. The law requires health insurance plans to spend at least 80 percent of premiums on medical care or give consumers rebates.

{mosads}The “Texas Department of Insurance’s unjustified request is nothing more than an early Christmas gift from Governor Perry’s allies to insurance companies,” delegation Chairman Lloyd Doggett (D-Texas) said in a statement. “Texas families deserve to get at least 80 cents of every premium dollar used for whatever health care they require. 20 cents of every dollar should be more than enough for overhead, profit, and filling the silk stockings with executive bonuses.”

Texas has requested that medical loss ratio (MLR) thresholds be lowered to 71 percent in 2011, 74 percent in 2012 and 77 percent in 2013.

“Without an adjustment,” Texas argues in its request, “the current MLR requirement will force carriers, regardless of size, to make dramatic cuts in their expense structures to remain profitable. Such cuts are likely [to] take the form of reduced commissions for agents and brokers. It is also likely that a number of carriers would exit the market, choosing instead to focus on select products and states.” 

In their letter, the Texas Democrats say there’s no evidence that the higher threshold would destabilize the state’s insurance market or cause insurers to leave the state. They also say Texans would lose more than $260 million in rebates — $350 per Texan covered by an individual health plan — over three years if the adjustment is approved.

“Once again,” the letter reads, “some in Texas are more interested in protecting insurance companies than protecting consumers.”

HHS so far has denied six states’ requests for MLR adjustments — Delaware, Florida, Indiana, Louisiana, Michigan and North Dakota. It has approved modified standards in another six states.