Assessing Health Insurers Using Medical Loss Ratio Data—Round II


In an attempt to reduce the amount private health insurance plans spend on administration and other items not directly related to patient care, the Affordable Care Act requires commercial carriers to maintain a minimum medical loss ratio (MLR). In 2012, health plans with medical loss ratios below the minimum were required to rebate their members the difference.  To enforce the new rule, carriers must report on standardized forms detailed information about their administrative expenses, their profits, and their efforts to improve quality of care.   In their first year, the research team analyzed this never-before-collected information, documenting the size of consumer rebates by state, insurers’ reductions in administrative costs and profit margins, and amounts that insurers of different types spend on quality improvement.  The research informed federal and state policy makers and the media about the effects of the requirement on administrative costs and profits and provided unprecedented insights into how insurers spend their premium revenue, particularly in the area of quality improvement.  This project would build on this work by updating the findings from the first year of research, using data for 2012 that will be released in 2013. The findings will yield important insights for regulators and policymakers striving to increase the efficiency of insurance markets.

Grant Details

Grantee Organization:
Wake Forest University Health Sciences
Principal Investigator:
Mark Hall, J.D.
Award Amount:
Approval Date:
April 1, 2013
Related Topics
Health Care Coverage

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