MLR Rebates May Reach $2.7 Billion in 2020

Insurers that participate in the individual, small-group and large-group markets are projected to issue a record high $2.7 billion in medical loss ratio (MLR) rebates to their customers this year — nearly doubling the $1.4 billion in rebates issued last year, according to a recent Kaiser Family Foundation analysis. Almost 75% of the rebates in 2020 will come from individual market insurers. Looking ahead, the analysis notes that even if individual market insurers experience losses in 2020 due to costs related to the COVID-19 pandemic, they could still owe rebates in 2021 because MLR rebates are calculated using the last three years of insurers’ financial data. Individual market rebates were so high in 2020 primarily because insurers had strong financial performances in 2018 and 2019.

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