Governor Scott Walker’s top insurance regulator is seeking permission from the federal government to allow Wisconsin health insurance companies to escape a law requiring health insurers to spend at least 80 cents of every dollar collected in their customer’s premiums on medical care.

 

In a letter sent Tuesday, Insurance Commissioner Theodore Nickel asked the federal government for a waiver from a rule in the federal health reform law that limits health insurer profits, salaries, marketing and other overhead costs to 20% of the amount spent by consumers in the individual market.  Insurers who spend more than this amount on non-medical expenses must provide refunds to consumers under the law.

 

If the federal government approves Nickel’s waiver request, health insurers who spend more than 20% of their customer’s premiums on overhead will no longer have to provide refunds, costing Wisconsinites who buy their own insurance plans $14 million, according to estimates included in the request.

 

“Yet again the Walker administration is putting special interests before the needs of Wisconsin families,” said Rep. Richards.  “Governor Walker’s top insurance regulator wants permission to ignore federal health reform rules so insurance companies can pocket even more profit at the expense of consumers who are already struggling to afford health insurance, housing, food and other essentials.”

 

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