More than 75 percent of insurers met or exceeded medical-loss ratio standards in 2011 and in 2012, spending enough of their premium dollars on medical services to avoid paying rebates to consumers under the healthcare reform law, according to a new report from the Government Accountability Office.
About 76 percent of insurers met or exceeded the minimum MLR standards in 2011 and 79 percent of insurers met or exceeded the standards in 2012. Overall, insurers in the large group market spent a higher share of their premiums on enrollees' medical claims and less on nonclaims costs, compared to individual and small group market insurers.
The GAO also found insurers in the large group market paid the highest rebate amount ($405 million) in 2011, while insurers in the small group market paid the highest amount ($207 million) in 2012.
Insurers across markets issued about $513 million in rebates for 2012. That's half of the amount paid in 2011, showing greater compliance by insurers with the Affordable Care Act's MLR rule.
Excellus Blue Cross Blue Shield was among insurers that paid no rebates to its members for 2012. The New York insurer spent $255 million more on benefits, such as hospital and physician services and prescriptions, than federal and New York state standards required that year, FierceHealthPayer previously reported.
Meanwhile, when the GAO interviewed eight insurers, they cited factors other than MLR rules for influencing their business practices since 2011, such as competition with other insurers and other requirements. And all eight insurers said the MLR requirements did not affect or minimally affected how much the spent on activities to improve healthcare quality.
Sen. John D. Rockefeller (D-W.Va.) recently told a Senate committee that the MLR has benefited the healthcare insurance industry, "working the way we hoped it would."
Rockefeller sang praises for the MLR, highlighting the hundreds of thousands of dollars in rebates that health insurers have sent to American families and small businesses during the past two years, FierceHealthPayer previously reported.