Dive Brief:
- More than 75% of insurers met or exceeded medical-loss ratio standards in 2011 and 2012, spending enough of their premium dollars on medical services to avoid paying rebates to consumers under the Affordable Care Act, the Government Accountability Office reported.
- Overall, health insurers in the large group market spent a higher share of their premiums on enrollees' medical claims than did individual and small-group market insurers, GAO said.
- Across markets, insurers issued about $513 million in rebates for 2012. That was about half of the amount paid out in 2011, thus showing greater compliance with the reform law's MLR rule.
Dive Insight:
Under MLR regulations, health insurers must refund money to customers if they spend less than 80% of collected premiums on medical services in the individual and small-group markets, or if they spend less than 85% of premiums for medical care in the large-group market.
Sen. John D. Rockefeller (D-WV), a proponent of the MLR requirement who requested the GAO report, has fought brokers' attempts to exclude brokerage commissions from plans' administrative expenses. Now GAO came back to report that excluding commissions would have decreased the $1.6 billion-plus in insurer rebates to consumers in 2011 and 2012 by about 75%.
Responding to GAO's July 10 report, an official with the National Association of Health Underwriters told Bloomberg BNA it's all a matter of what questions are asked: And GAO's study failed to consider benefits such as the money that brokers save consumers by finding plans that best meet their needs.