ACA Exchange Insurers Could Be Gaming MLR Rebate System

Health insurers on the Affordable Care Act (ACA) exchanges are consistently overestimating the amount they spend on enrollee benefits as part of their medical loss ratio (MLR) reporting, resulting in “hundreds of millions of dollars in underpaid policyholder rebates,” according to new research. Health policy experts tell AIS Health that the findings could fuel greater regulatory scrutiny on individual market carriers, which are increasingly making a profit on the exchanges and had to shell out less than usual in claims last year due to routine-care deferral during the COVID-19 pandemic.

“With the pandemic, I think it is definitely changing the dynamics of the different stakeholders in the health care markets — so obviously the hospitals and physicians lost a lot of money last year, whereas the plans did pretty well because of that; their claims costs went down,” says Krutika Amin, an associate director for the Kaiser Family Foundation (KFF) Program on the ACA, who was not involved with the study. “So I think that is creating a conversation around whether there’s a need to update MLR requirements.”

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Leslie Small

Leslie Small

Leslie has been working in journalism since 2009 and reporting on the health care industry since 2014. She has covered the many ups and downs of the Affordable Care Act exchanges, the failed health insurer mega-mergers, and hundreds of other storylines spanning subjects such as Medicaid managed care, Medicare Advantage, employer-sponsored insurance, and prescription drug coverage. As the managing editor of Health Plan Weekly and Radar on Drug Benefits, she writes and edits for both publications while overseeing a small team of reporters who also focus on the managed care sector. Before joining AIS Health, she was a senior editor for the e-newsletter Fierce Health Payer, and she started her career as a copy editor at multiple local newspapers. She graduated with a dual degree in journalism and political science from Penn State University.

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