The MLR, part of the Patient Protection and Affordable Care Act, requires health insurers to spend at least 80 percent of health premiums for individual and small group markets, and 85 percent for large group markets, on medical care. The remaining 15 or 20 percent of costs can be used toward administrative costs and profit.
The proposed bill would exclude insurance brokers’ fees from counting as administrative costs, according to the report. The brokers believe the MLR hurts their business as insurers become more inclined to not work with brokers to maintain more profit.
More Articles on the Medical Loss Ratio:
HHS: PPACA Saved Consumers $2.1B in Health Premiums
Health Insurers to Dispense $1.1B in Rebates This Summer
CMS: Health Insurers That Meet MLR Must Notify Policyholders
