Four States Given Waivers for Rules in Health Care Law

The states are Florida, New Jersey, Ohio and Tennessee, the administration told Congress.

Lawmakers said that many other states, insurers and employers needed similar exemptions from some of the law’s requirements and would seek waivers if they knew of the option.

Steven B. Larsen, a top federal insurance regulator, said the waivers would allow many consumers to keep the coverage they had, a goal often espoused byPresident Obama.

Under the law and rules issued by the administration, health plans this year must generally provide at least $750,000 in coverage for essential benefits like hospital care, doctors’ services and prescription drugs. In states granted the waivers, many health plans with much lower annual limits on coverage may continue to operate.

“Unfortunately, limited benefit plans, or mini-med plans, are often the only type of insurance offered to some workers,” said Mr. Larsen, who is director of the federalCenter for Consumer Information and Insurance Oversight. It was to protect such coverage that the administration granted the waivers, he said.

To qualify for a waiver, a state, an employer or an insurer must show that compliance with the federal requirement would cause“a significant increase in premiums or a decrease in access to benefits.”

Mr. Larsen said the administration had granted temporary waivers to the four states and to more than 900 health plans covering 2.4 million people, or fewer than 2 percent of all those with employer-sponsored insurance.

Each of the states had a law, policy or program that required or encouraged health plans to offer limited-benefit coverage, Mr. Larsen said.

At a hearing of a House Energy and Commerce subcommittee, Republicans repeatedly asked: if the new law is so good, why have so many waivers been granted?

Representative Fred Upton, Republican of Michigan and chairman of the House Energy and Commerce Committee, said the waivers showed that the law, approved by Congress without any Republican votes, was“fundamentally flawed.” Without the waivers, Mr. Upton said, hundreds of thousands of people would have lost insurance or experienced a reduction in benefits.

RepresentativeHenry A. Waxmanof California, the senior Democrat on the committee, said the limited-benefit plans were clearly inadequate. But he said the waivers would allow“a smooth transition between now and 2014,” when insurers and employers will be forbidden to impose limits on the dollar value of benefits.

The hearing gave Republicans their first opportunity to investigate the activities of the federal office that regulates private insurance and has dozens of other important duties under the new health law. In his 2012 budget, Mr. Obama requested more than $93 million for the office, which has 252 employees.

The insurance office originally reported directly toKathleen Sebelius, the secretary of health and human services. In early January, she moved it into the Centers for Medicare and Medicaid Services, whose programs insure more than 100 million people.

House Republicans expressed concern that power over public and private health insurance programs was concentrated in one agency led by an official, Dr.Donald M. Berwick, who had not been confirmed by the Senate.

“He is in charge of almost all insurance coverage in the United States,” said Representative Michael C. Burgess, Republican of Texas.

Jay Angoff, former director of the insurance regulation office, said,“There are efficiencies to be gained by merging it” with the agency that runsMedicareandMedicaid. However, in response to questions, Mr. Larsen said,“We do not anticipate laying people off.”

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