The Maine Exception

There was an interesting development this week in the implementation of the Affordable Care Act.  The state of Maine was granted a waiver to one of the health reform measure’s central components – the requirement that health insurance companies spend 80 cents of every dollar on benefits and healthcare services for their clients. 

The Department of Health and Human Services (HHS) has acceded to Maine’s request for an exemption to the so-called medical loss ratio and has said that insurers serving the individual market in the state must now meet a 65 percent threshold until the end of 2013.

The reason?  According to the Bangor Daily News, there are only three insurers that provide coverage to the non-group individual market in Maine and one of them, Megalife, said they may have to drop out of the market if the 80 percent medical loss ratio went into effect.  If Megalife did stop selling policies in Maine, which would leave 14,000 of the state’s citizens looking for new insurance.

The Maine case, as well as many of the more than 1,000 waivers that have been granted since ACA implementation began, illustrate the difficulty in trying to adapt a massive piece of legislation to a diverse country made up of communities and marketplaces with vastly different characteristics.  It also underscores the need for flexibility in implementation if we’re going to maintain Americans’ access to affordable health coverage products.