Delaware’s insurance commissioner asked the federal government for a little flexibility, but got “no” for an answer this week.
The federal Affordable Care Act requires insurance companies to spend at least 80 percent of premium dollars on patient claims and health care, rather than costs such as administration, advertising and marketing.
Insurance commissioner Karen Weldin Stewart says Delaware has a very small insurance marketplace, and she wants to make sure customers have affordable options.
“We were afraid about disruption in the market. It’s not that we are against [the 80-percent rule], it’s just that we wanted a smoother transition, to take small steps instead of one giant step,” Stewart said.
After reviewing the individual insurance marketplace, federal analysts said they don’t expect the 80-percent rule to cause significant disruptions or force insurers to withdraw from the state.
Blue Cross Blue Shield of Delaware, Aetna and Golden Rule are the largest firms in Delaware selling individual health insurance.
According to 2010 estimates, Blue Cross spent about 88 percent of premium dollars on health- and care-related expenses. Aetna and Golden Rule spent about 70 percent of dollars on health-related activities.
Companies that don’t meet the 80 percent-rule have to send rebates to customers.
For many companies that percentage, called a medical-loss ratio, fluctuates from year to year.
Health-care advocates say a healthy medical-loss ratio helps consumers shop for insurance and find the best value for their money.