Insurance Companies Responding to Reform Law's Medical Loss Rule

eAlert ee9eab12-3bab-49ed-b234-0e644dccb8dc

<p>The Affordable Care Act’s requirement that health insurers must spend at least 80 or 85 percent of the premiums they collect on patient care or quality improvement, instead of using the money for administrative costs or profits, seems to be having its intended effect—at least when it comes to for-profit carriers operating in the individual insurance market. </p><p>As discussed in <a href="/publications/journal-article/2013/sep/impact-medical-loss-regulation-financial-performance-health">a new article in <em>Health Affairs,</em></a> Commonwealth Fund–supported research by Michael McCue, Mark Hall, and Xinliang Liu shows that for-profit health plans selling individual coverage increased their spending on medical claims and quality improvement, reduced premiums, or both, between 2010, the year before the rule went into effect, and 2011. </p>
<p>Although insurers in the small-group and large-group markets also lowered their administrative costs, this reduction appears appear to have been absorbed, at least partially, by small increases in profits.</p>
<p>Read more on <a href="/publications/journal-article/2013/sep/impact-medical-loss-regulation-financial-performance-health">commonwealthfund.org.</a> </p>

http://www.commonwealthfund.org/publications/newsletters/ealerts/2013/sep/insurance-companies-responding