According to a recent Commonwealth Fund Report, the Affordable Care Act’s medical loss ratio (MLR) provision has paid consumers more than $5 billion cumulatively from 2011 to 2013, through insurance company rebates and reduced health plan spending. Insurers with MLRs below the minimum must rebate the difference to consumers.
Under the law, insurers must spend 80% for small-group or individual plans and 85% for large-group plans on medical care.
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University researchers Michael McCue and Mark Hall found that in 2012 insurers paid out $513 million in consumer rebates, nearly half of the amount paid to consumers the previous year, indicating greater compliance with the MLR rule.
The researchers found that insurers spending to improve the quality of patient care remained the same each year and insurers reduced spending on brokers’ fees, marketing and administrative costs by $1.4 billion in 2012 as well as a $350 billion reduction of overhead in 2011.
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