Indiana’s request to opt out of the federal government’s new rules for health insurers was denied.

The state requested a waiver of the requirement that insurance companies use 80 percent of premiums on medical care or health care quality improvement.

Plans that do not meet the requirement must issue rebates to their customers beginning in 2012, which could total $24 million in Indiana. To avoid the rebates, insurers can reduce premiums or lower administrative costs.

In a letter to Health and Human Services (HHS), Indiana Department of Insurance Chief Deputy Commissioner Robyn Crosson said the rules had already led to 10 percent of insurers leaving the individual market. HHS replied that no evidence supported the state’s claim.

Read the HHS response here.

See Indiana’s request to HHS.