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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