Florida to HHS: The MLR is Just Killing Us

McCarty said in the letter that HHS has been dismissive of insurers' testimony and announcements that they would leave the individual market, and allowed significant damage to already occur.

"Since the passage of the [PPACA], Florida has not received any applications for new entrants into the individual market, and no new issuers appear to be interested in expanding into this market," McCarty wrote.

McCarty outlined the severe impact on the agent community as a result of the HHS decision to deny the exemption.

He cited an "informal survey" as showing harm to agents as a result of cuts in agent commissions, and said the FIO intends to send notarized letters that clearly document the MLR's impact on the agent community by Jan. 6.

The FIO has been collecting data and testimony for almost a year on the challenges to its market created by the higher MLR, which indirectly cuts off agent commission at the knees by considering those fees as part of the administrative element of the ratio and not the care portion.

McCarty portrayed the agents as consumer advocates in his letter, saying their role is to assist consumers in gaining precertifications for various medical procedures and helping consumers navigate the healthcare delivery system.

McCarty also issued a memo Dec. 28 notifying Florida health insurers and HMOs that Florida has not enacted any guidance electing to use the statutory 50 employee mark as the upper limit for purposes of reporting small employer MLRs, so that, in effect the state law would be superseded by the more generous (for MLR purposes) federal PPACA definition of a small group employer as having employees between 1 and 100.