New Blog Post: Medical Loss Ratio Regulations Good for Consumers

eAlert e0a2ebeb-a613-4247-a270-a2ea7e4ccf07

<p>This week the Department of Health and Human Services (HHS) issued new interim final regulations governing the medical loss ratio (MLR) for health insurance plans—the percentage of enrollees’ premiums that plans spend on actual medical care, as opposed to administration and profits. In a new post on <a href="/blog/2010/medical-loss-ratio-regulations-good-consumers">The Commonwealth Fund Blog</a>, Fund vice president Sara R. Collins, Ph.D., says that the Affordable Care Act's MLR regulations will improve the value consumers receive for their health insurance payments and will place downward pressure on premiums over time. </p>
<p>Commonwealth Fund analysis has found that, for some small employers, as much as 30 percent of premium payments go to administration, and some individuals see 40 percent of their payments spent on administration. Under the Affordable Care Act, beginning in 2011, health plans are required to report their total spending on medical care and activities to improve the quality of care relative to their non-medical costs, such as those for marketing, advertising, underwriting, broker commissions, profits, and compensation. </p>
<p>Beginning in August 2012, health plans in the large-employer group market that spend less than 85 percent of their premiums on medical care and quality improvement activities, and plans in the small-group and individual markets that spend less than 80 percent on the same, will be required to offer rebates to enrollees based on their 2011 MLR reports. </p>
<p>HHS estimates that 74.8 million people are in health plans that will be protected by the new requirements. In 2012, up to 9 million people might be eligible for rebates worth $1.4 billion. Visit the Fund Blog to read the <a href="/blog/2010/medical-loss-ratio-regulations-good-consumers">complete post</a>. </p>
<p> </p>