MLR benefits insurance industry, consumers


The medical-loss ratio has positively affected the healthcare insurance industry, "working the way we hoped it would," Sen. John D. Rockefeller IV (D-W.Va.) said Wednesday at a Senate hearing, reports Property Casualty 360.

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. "That's not something you see every day--an insurance company giving premium dollars back to its customers," he said in his testimony.

Rockefeller also noted that insurance market rules were "rigged against consumers" before the MLR, when consumers couldn't compare products or choose plans because insurers were not issuing accurate cost information.

Thanks to the MLR, insurers must publicly share premium income and spending on medical claims for the individual, small group and large group markets.

Insurers issued about $513 million in rebates for 2012 under the medical-loss ratio requirement, according to a Commonwealth Fund report released earlier this month. That's half of the amount paid in 2011, showing greater compliance by insurers with the MLR rule.

Yet Republican lawmakers remain wary of the healthcare reform provision. Sen. John Thune (R-S.D.) said during the hearing that certain industry experts believe the MLR could cause premiums to rise while narrowing competition in the marketplace, notes Property Casualty 360.

But Rockefeller continued to defend the MLR. "The even better news is that the law has forced insurance companies to review their operations and reduce their non-healthcare costs. Rebate amounts are dropping as health insurance companies increase the efficiency and quality of their products," he said.

For more:
- here's the Property Casualty 360 piece
- read the testimony

Related Articles:
Better MLR compliance reduces consumer rebates
Insurers to rebate $1B to consumers under medical-loss ratio
Narrow networks remain controversial despite promise of cost control
Insurers lose battle as NAIC approves tough MLR rules