Unfortunately, the statutory language in PPACA gives regulators little flexibility in waiving the MLR requirements.
However, by historical happenstance the MLR provisions were set when investment returns were already very low.
Among the effects of MLR minimums is the greater prevalence of is high deductible policies.
If the 80% MLR target is missed, rebates are to be given to the insured members.
This portion commonly referred to as the Medical Loss Ratio (MLR) limits insurance companies profitability.
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Sebelius estimates that 9 million people will get refunds based on the MLR rules next year.
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Ungar is pointing to the medical loss ratio (MLR) provisions of the law.
Interest rates will rise, investment returns will, the subsidy from returns to premiums will rise and thus so will the MLR.
For in the areas where the NAIC did have latitude to make the MLR regulations less onerous, they made the onerous choice.
Under the current rules if you are adept at either containing costs or pricing well, your MLR falls and it translates into profitability.
With government-mandated MLRs, and forced rebates to consumers if you push the MLR down too far, what will be the incentive to keep costs in check?
Maine Superintendent of Insurance Mila Kofman wrote a letter to HHS Secretary Kathleen Sebelius, asking Sebelius to waive the MLR rules for Maine until 2014.
Increased premiums are a mathematical result of the MLR rules.
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As a result the MLR has been set at a rate which will have virtually no influence upon anything at all as soon as we return to more normal economic conditions.
WellPoint spokeswoman Kristin Binns said the company would work with regulators to implement the MLR requirement, but did not comment on whether it had shifted any costs or changed its accounting practices.
As of the end of 2009 the study found the industry average MLR was about 85% on large group plans but only about 74% on individual plans, well below the new mandate.
Health plans themselves had hoped to be able to count in-house programs like nurse lines, doctor ratings and wellness programs, what others might see more as cost-containment than care, towards the MLR.
And the news is not good: the MLR regulations are likely to lead to a significant disruption of the health insurance market, with many insurers exiting the market, driving premiums up and choices down.
So what other explanations could we have for this fall in the MLR? or if you prefer, this rise in the portion of premiums that get eaten up by something other than medical care?
"There is not any issuer of limited benefit coverage that could meet the enhanced MLR standards, " said Neil Trautwein, a vice president at the National Retail Federation, using the abbreviation for medical loss ratio.
Getting to an 85% MLR would drive significant margin expansion for Triple-S, so it could realize several hundred basis points of margin expansion before it had to realistically consider refunding money back to customers.
As a result, these naysayers argued, the new MLR rules are really no big deal and there is no reason for me to suggest that the the HHS regulations would have the dramatic impact I have predicted.
Even if they only had to increase their MLR by just one percent (and I assure you that it will, in reality, be far more), what does that one percent do to a profit margin of 2.2. percent?
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The aircraft procured for the Marine MLR will be inadequate for the joint services missions the V-22 was designed to perform, thereby ensuring that expensive new development and acquisition programs will have to be undertaken to meet these other requirements.
The alternative is to do away with MLR requirements of Obamacare and allow the health insurers to continue to spend less and less on customer care to protect their profits, which means more and more disagreement with physicians over what the insurers are willing to cover and what they are not willing to pay for, leaving the consumer caught in the middle.
With the publication of the National Association of Insurance Commissioners (NAIC) recommendations laying out what private insurance companies should be required to spend on actual health care for their customers in order to meet the medical-loss ratios (MLR) mandated by the Affordable Care Act, private insurers are threatening to abandon markets where they believe they can no longer make money under the proposed regulations.
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