Skip to main content
Subscribe
  • Sign Up Free
  • Login
  • Subscribe
  • News
    • Current News
    • Providers
    • Insurance
    • Government
    • Finance
    • Technology
    • Safety & Quality
    • Digital Health
    • Transformation
    • ESG
    • People
    • Regional News
    • Digital Edition (Web Version)
    • Patients
    • Operations
    • Care Delivery
    • Payment
    • Midwest
    • Northeast
    • South
    • West
  • Opinion
    • Bold Moves
    • Breaking Bias
    • Commentaries
    • Letters
    • Vital Signs Blog
    • From the Editor
  • Events & Awards
    • Awards
    • Conferences
    • Galas
    • Virtual Briefings
    • Webinars
    • Nominate/Eligibility
    • 100 Most Influential People
    • 50 Most Influential Clinical Executives
    • Best Places to Work in Healthcare
    • Excellence in Governance
    • Health Care Hall of Fame
    • Healthcare Marketing Impact Awards
    • Top 25 Emerging Leaders
    • Top Innovators
    • Diversity in Healthcare
      • - Luminaries
      • - Top 25 Diversity Leaders
      • - Leaders to Watch
    • Women in Healthcare
      • - Luminaries
      • - Top 25 Women Leaders
      • - Women to Watch
    • Digital Health Transformation Summit
    • ESG: The Implementation Imperative Summit
    • Leadership Symposium
    • Social Determinants of Health Symposium
    • Women Leaders in Healthcare Conference
    • Best Places to Work Awards Gala
    • Health Care Hall of Fame Gala
    • Top 25 Diversity Leaders Gala
    • Top 25 Women Leaders Gala
    • - Hospital of the Future
    • - Value Based Care
    • - Hospital at Home
    • - Workplace of the Future
    • - Digital Health
    • - Future of Staffing
    • - Hospital of the Future (Fall)
  • Multimedia
    • Podcast - Beyond the Byline
    • Sponsored Podcast - Healthcare Insider
    • Video Series - The Check Up
    • Sponsored Video Series - One on One
  • Data Center
    • Data Center Home
    • Hospital Financials
    • Staffing & Compensation
    • Quality & Safety
    • Mergers & Acquisitions
    • Data Archive
    • Resource Guide: By the Numbers
    • Surveys
    • Data Points
  • Newsletters
  • MORE+
    • Contact Us
    • Advertise
    • Media Kit
    • Jobs
    • People on the Move
    • Reprints & Licensing
MENU
Breadcrumb
  1. Home
  2. Finance
June 20, 2013 01:00 AM

Reform Update: Medical-loss ratio rules have saved consumers billions, but will it last?

Jonathan Block
  • Tweet
  • Share
  • Share
  • Email
  • More
    Reprints Print

    The health reform law's provision requiring insurers to spend at least 80% of their premium dollars on medical expenses was a major factor in helping consumers save $3.9 billion in premiums last year, according to an analysis released today from the CMS (PDF). But whether that will translate into lower premiums for 2014 is up for debate.

    Consumers saved more than $3.4 billion from lower premiums in 2012, and another half a billion in rebates they received if their carrier did not clear the so-called medical-loss ratio. That rule dictates that 80 cents of every premium dollar be spent on patient care for individual plans, and 85 cents for small-group plans. The provision has been in effect since 2011.

    The CMS found that the MLR provision, also known as the “80/20” rule, prompted many plans to lower their rates or improve their coverage to meet the standard. If an insurer failed to meet the ratio for a plan, a rebate was issued to the member in the form of a check, a credit put on credit or debit card used to pay the premium or a reduction in future premiums. In the case of small-group coverage, the employer passes along the rebate through those mechanisms or uses the rebate in another way that helps employees, such as providing more generous benefits.

    Teresa Miller, director of oversight for CMS' Center for Consumer Information and Insurance Oversight, said that 8.5 million Americans will receive $500 million in rebates this year, averaging to about $100 per family.

    CCIIO Director Gary Cohen said that other factors also contributed to the reduction in premiums, noting that other provisions of the Patient Protection and Affordable Care Act have lead to increased competition among carriers and insurers' operating more efficiently.

    Cohen, speaking on a call with reporters, was asked whether the benefits consumers see from the MLR provision could be eclipsed by higher premiums next year driven by other provisions of the law.

    Cohen responded that the signals on premiums have varied from state to state depending on the level of competition among insurers. States that already had robust competition in insurance markets are seeing the most favorable rates proposed for 2014.

    Senators to Sebelius: Navigate the Navigators

    Senate Finance Committee Ranking Member Sen. Orrin Hatch (R-Utah) and eight colleagues have written HHS Secretary Kathleen Sebelius expressing concerns that the reform law's Navigator program lacks safeguards to prevent against fraud. Navigators are charged with helping consumers apply for health coverage through state insurance exchanges. “The standards proposed by your department could result in a convicted felon receiving federal dollars and gaining access to confidential taxpayer information,” the senators wrote today. “The unreasonably low standard for becoming a navigator not only undermines the state's ability to ensure consumers are protected but raises questions about the appropriate use of federal resources and the protection of highly sensitive consumer information.”

    Enrollment in consumer-directed health plans growing

    Between 2011 and 2012, enrollment in consumer-directed health plans, which give consumers more control over their health care spending, grew 19%, according to a study released Monday by the American Association of Preferred Provider Organizations. AAPPO analyzed data from the Mercer National Survey of Employer Sponsored Health Plans and found between 2011 and 2012, the number of employees who enrolled in a CDHP grew by 6 million, to 39 million. Also, in 2012, 36% of large employers (500 or more employees) offered CDHPs, up from the 32% the prior year.

    Follow Jonathan Block on Twitter: @MHjblock

    Letter
    to the
    Editor

    Send us a letter

    Have an opinion about this story? Click here to submit a Letter to the Editor, and we may publish it in print.

    Recommended for You
    GenesisCare files for Chapter 11 bankruptcy, seeks to offload U.S. operations
    GenesisCare files for Chapter 11 bankruptcy, seeks to offload U.S. operations
    bankruptcy 2
    Friday Health Plans shutting down amid financial shortfall
    Most Popular
    1
    More healthcare organizations at risk of credit default, Moody's says
    2
    Centene fills out senior executive team with new president, COO
    3
    SCAN, CareOregon plan to merge into the HealthRight Group
    4
    Blue Cross Blue Shield of Michigan unveils big push that lets physicians take on risk, reap rewards
    5
    Bright Health weighs reverse stock split as delisting looms
    Sponsored Content
    Daily Finance Newsletter: Sign up to receive daily news and data that has a direct impact on the business and financing of healthcare.
    Get Newsletters

    Sign up for enewsletters and alerts to receive breaking news and in-depth coverage of healthcare events and trends, as they happen, right to your inbox.

    Subscribe Today
    MH Magazine Cover

    MH magazine offers content that sheds light on healthcare leaders’ complex choices and touch points—from strategy, governance, leadership development and finance to operations, clinical care, and marketing.

    Subscribe
    Connect with Us
    • LinkedIn
    • Twitter
    • Facebook
    • RSS

    Our Mission

    Modern Healthcare empowers industry leaders to succeed by providing unbiased reporting of the news, insights, analysis and data.

    Contact Us

    (877) 812-1581

    Email us

     

    Resources
    • Contact Us
    • Advertise with Us
    • Ad Choices Ad Choices
    • Sitemap
    Editorial Dept
    • Submission Guidelines
    • Code of Ethics
    • Awards
    • About Us
    Legal
    • Terms and Conditions
    • Privacy Policy
    • Privacy Request
    Modern Healthcare
    Copyright © 1996-2023. Crain Communications, Inc. All Rights Reserved.
    • News
      • Current News
      • Providers
      • Insurance
      • Government
      • Finance
      • Technology
      • Safety & Quality
      • Digital Health
      • Transformation
        • Patients
        • Operations
        • Care Delivery
        • Payment
      • ESG
      • People
      • Regional News
        • Midwest
        • Northeast
        • South
        • West
      • Digital Edition (Web Version)
    • Opinion
      • Bold Moves
      • Breaking Bias
      • Commentaries
      • Letters
      • Vital Signs Blog
      • From the Editor
    • Events & Awards
      • Awards
        • Nominate/Eligibility
        • 100 Most Influential People
        • 50 Most Influential Clinical Executives
        • Best Places to Work in Healthcare
        • Excellence in Governance
        • Health Care Hall of Fame
        • Healthcare Marketing Impact Awards
        • Top 25 Emerging Leaders
        • Top Innovators
        • Diversity in Healthcare
          • - Luminaries
          • - Top 25 Diversity Leaders
          • - Leaders to Watch
        • Women in Healthcare
          • - Luminaries
          • - Top 25 Women Leaders
          • - Women to Watch
      • Conferences
        • Digital Health Transformation Summit
        • ESG: The Implementation Imperative Summit
        • Leadership Symposium
        • Social Determinants of Health Symposium
        • Women Leaders in Healthcare Conference
      • Galas
        • Best Places to Work Awards Gala
        • Health Care Hall of Fame Gala
        • Top 25 Diversity Leaders Gala
        • Top 25 Women Leaders Gala
      • Virtual Briefings
        • - Hospital of the Future
        • - Value Based Care
        • - Hospital at Home
        • - Workplace of the Future
        • - Digital Health
        • - Future of Staffing
        • - Hospital of the Future (Fall)
      • Webinars
    • Multimedia
      • Podcast - Beyond the Byline
      • Sponsored Podcast - Healthcare Insider
      • Video Series - The Check Up
      • Sponsored Video Series - One on One
    • Data Center
      • Data Center Home
      • Hospital Financials
      • Staffing & Compensation
      • Quality & Safety
      • Mergers & Acquisitions
      • Data Archive
      • Resource Guide: By the Numbers
      • Surveys
      • Data Points
    • Newsletters
    • MORE+
      • Contact Us
      • Advertise
      • Media Kit
      • Jobs
      • People on the Move
      • Reprints & Licensing