title: The federal medical loss ratio rule: implications for consumers in year 2.
abstract: For the past two years, the Affordable Care Act has required health insurers to pay out a minimum percentage of premiums in the form of medical claims or quality improvement expenses--known as a medical loss ratio (MLR). Insurers with MLRs below the minimum must rebate the difference to consumers. This issue brief finds that total rebates for 2012 were $513 million, half the amount paid out in 2011, indicating greater compliance with the MLR rule. Spending on quality improvement remained low, at less than 1 percent of premiums. Insurers continued to reduce their administrative and sales costs, such as brokers' fees, without increasing profit margins, for a total reduction in overhead of $1.4 billion. In the first two years under this regulation, total consumer benefits related to the medical loss ratio--both rebates and reduced overhead--amounted to more than $3 billion.
authors.affiliation: Virginia Commonwealth University, USA. mccue@vcu.edu
authors.forename: Michael J
authors.initials: MJ
authors.lastname: McCue
authors.forename: Mark A
authors.initials: MA
authors.lastname: Hall
mesh_terms: D003256:Community Participation / Q000191:economics* / Q000331:legislation & jurisprudence*; D019983:Guideline Adherence; D006801:Humans; D007345:Insurance Claim Review / Q000191:economics / Q000331:legislation & jurisprudence / Q000458:organization & administration*; D019458:Insurance Coverage / Q000191:economics / Q000331:legislation & jurisprudence / Q000458:organization & administration*; D007348:Insurance, Health / Q000191:economics / Q000331:legislation & jurisprudence / Q000458:organization & administration*; D058991:Patient Protection and Affordable Care Act / Q000191:economics / Q000331:legislation & jurisprudence / Q000458:organization & administration*; D058996:Quality Improvement / Q000191:economics / Q000331:legislation & jurisprudence / Q000458:organization & administration; D014481:United States