Report: Medical-Loss Ratio Rule Would Have Led to Rebates for 2010
Private health insurers would have paid their customers about $2 billion in rebates had the medical-loss ratio rule under the federal health reform law gone into effect in 2010, according to a report by the Commonwealth Fund, National Journal reports (McCarthy, National Journal, 4/5).
Report Findings
The report found that about 23% of privately insured U.S. residents would have received rebates if the MLR rule had gone into effect in 2010. About 5.3 million people who receive coverage through the individual market would have received a total of about $1 billion in rebates. The other $1 billion would have been distributed among 10 million people with coverage in the small- and large-group markets.
The Commonwealth Fund also found that for-profit insurers in 2010 would have exceeded spending ratio limits more often than not-for-profit companies. In addition, provider-sponsored health plans would have been less likely to owe rebates than other types of plans (Daly, Modern Healthcare, 4/5).
MLR Rule
The MLR rule went into effect on Jan. 1, 2011, and eligible consumers should receive their first rebates by Aug. 1, 2012 (Alltucker, Arizona Republic, 4/4).
CWF Vice President Sara Collins said, "Consumers can expect to see some relief from high premium costs beginning this year, either in the form of rebates or a reduction in their premiums as insurers lower rates to meet the MLR minimums" (National Journal, 4/5).
Insurers Respond
Robert Zirkelbach, press secretary for America's Health Insurance Plans, said, "Medical claims are the real driver of costs." He argued that other provisions in the health reform law "will result in premiums increasing far more than the value of these potential rebates." Zirkelbach said the MLR rule "doesn't do anything to address the real driver of health insurance costs" (Arizona Republic, 4/4).
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