Exploring the medical los$$ ratio requirement
When you see the phrase “medical lo$$ ratio requirement,” what do you think?
OK, I helped you there. My excuse is that the phrase desperately needed those dollar signs.
Money back in their hands is generally music to people's ears, and "medical loss ratio requirement" just doesn't sing. That's probably why the whole concept is more commonly referred to as "health insurance rebate."
Briefly, the Patient Protection and Affordable Care Act sets the percentage of premiums that insurance companies are allowed to spend on administrative costs. For the individual and small-group markets, the ratio is 80 percent on medical care and health care improvement activities to 20 percent for administrative care. For large group markets, the ratio is 85 to 15. Government has the ability to adjust those ratios if it finds that imposing them would destabilize the insurance market in an area.
Insurers that exceed their administrative cost allowances are required to give rebates by Aug. 1. Some rebates go directly to individuals, but workplace health insurance rebates may be processed through the employer.
This was the first year the provision went into effect. In Pennsylvania, rebates totaling $51,588,303 are going to 575,551 consumers, for an average rebate per family of $165.
For a list of which insurers were required to pay rebates in Pennsylvania, click here. The most sizable rebate ordered in the state was $17.8 million for Keystone Health Plan East's large group market plans.
Speaking of new regulations, PPACA also requires insurance companies to get permission before they increase insurance rates for individual or small-group rates by an average of 10 percent or more. This page lists insurers who have requested that permission and also allows you to search by the name of your insurer.
Finally, here's a pretty infographic about mobile health apps. One tidbit: Doctors are 250 percent more likely than other consumers to own a tablet computer.
Heather Stauffer covers Lancaster County, nonprofits and health care. You can reach her at 717-285-4237, 717-236-4300, ext. 289, or firstname.lastname@example.org. Follow her on Twitter, @StaufferCPBJ.