Medical Loss Ratio rules — which require insurers to spend a minimum percentage of dollars on premium coverage — are where the estimated savings come from. Under the PPACA, insurers who do not meet a minimum 80 percent MLR for individual and small-group markets and 85 in large-group markets would be mandated to give rebates to people they insure. There are exceptions if the MLR limit drives too many insurance companies out of a state market and limits available plans for consumers in that state. In that event, individual states can request waivers from the U.S. Department of Health and Human Services.
Commonwealth Fund President Karen Davis said in a press release, “The Affordable Care Act sets rules for insurers to ensure that consumers are not bearing the burden of unreasonably high administrative and overhead costs.”
Here are the top five states where insurers don’t meet the MLR and the total rebate dollars private insurers would have had to give back to individually covered consumers if the PPACA had been in place since 2010.
• Texas — $255 million
• Florida — $202 million
• Virginia — $128 million
• Illinois — $112 million
• Maryland — $109 million
Commonwealth Fund has a complete table with all 50 states on its website.
More Articles on the Patient Protection and Affordable Care Act:
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