Kentucky insurance companies have been spared another year of having to comply with a portion of the new federal insurance reforms.
Kentucky is one of six states that asked for and received a waiver from the federal government. Under the new agreement insurance companies that received a waiver will spend 75 percent on customer premiums. States that didn’t receive a waiver will pay 80 percent.
The Kentucky Department of Insurance requested the waiver to protect smaller insurance companies and to ease them into the reforms, said Commissioner of Kentucky’s Department of Insurance Sharon Clark.
“The issues we were concerned about were some of the smaller companies that did not have the large business because if you think about it you have the same administrative expense if you have a thousand lives insured or a hundred thousand lives insured,” she said.
The department was concerned that the reforms would cause companies to leave the state. So far none have. But in discussions with the U.S. Department of Health and Human Services, Time insurance would be in jeopardy if the rate was increased.
“Kentucky is not going to appeal this. We are going to go ahead and accept what the federal government approved and then we are going to go forth from there,” said Clark.
The department originally requested three years to fully comply with this portion of the reform, asking for a 70 percent rate in 2012; 75 percent in 2013; and the full 80 percent in 2014. The U.S. Department of Health and Human Services granted the state one year to comply.
Eight insurance companies in Kentucky represent 143,000 lives.