How the ACA's medical loss ratio rule protects consumers and insurers against ongoing uncertainty
- Collection:
- Health Policy and Services Research
- Series Title(s):
- Issue brief (Commonwealth Fund)
- Author(s):
- Hall, Mark A., author McCue, Michael J., author
- Contributor(s):
- Commonwealth Fund, issuing body.
- Publication:
- [New York, N.Y.] : The Commonwealth Fund, July 2019
- Language(s):
- English
- Format:
- Text
- Subject(s):
- Insurance Carriers -- economics Insurance, Health -- economics Uncertainty Consumer Behavior Cost Sharing Forecasting Insurance, Health -- trends Humans United States United States.
- Genre(s):
- Technical Report
- Abstract:
- ISSUE. The Affordable Care Act's rule on minimum medical loss ratios (MLRs) protects consumers by capping insurers' profits and overhead. In the early years of the law, these caps were rarely used because most insurers in the individual health insurance market experienced substantial losses. More recently, however, insurers are earning substantial profits while the individual market is rattled by regulatory uncertainty and change. GOAL. To understand the ongoing role that the medical loss ratio rule plays in the individual health insurance market. METHODS. Analysis of insurers' financial performance 2015-2017, as reported to the federal government. KEY FINDINGS AND CONCLUSION. Consumer rebates under the MLR rule increased noticeably in 2017 as insurers raised rates and regained profitability. At the same time, the rule's calculation of MLRs based on a three-year rolling average allowed insurers in 2017 to recoup a portion of their losses from earlier years. As the individual market continues to experience cycles of profits and losses, the MLR rule dampens the severity of these cycles, thus protecting insurers as well as consumers.
- Copyright:
- Reproduced with permission of the copyright holder. Further use of the material is subject to CC BY license. (More information)
- Extent:
- 1 online resource (1 PDF file (8 pages))
- Illustrations:
- Illustrations
- NLM Unique ID:
- 101750780 (See catalog record)
- Permanent Link:
- http://resource.nlm.nih.gov/101750780