The divisive medical loss ratio provision of the Affordable Care Act mandates that carriers issue refunds to customers if they spend less than 80% of premiums in the individual and small group markets, and less than 85% in the large group market.
That requirement has squeezed producer profits by significantly decreasing the amount carriers can spend on broker commission. And it’s not too much of a stretch to assume that those carriers paying out the highest MLR rebates may also be those who best reward producers.
According to a report from SNL Insurance, Blue Cross & Blue Shield of Florida paid the largest refund to policyholders, with $10.1 million in refunds in its home state. The insurer reported a medical loss ratio of 78.6% on small-group business in 2013, down from 79.3% in 2012.
Other carriers stung by the MLR provision last year include:
1. Health Options Inc. (Florida): $9.1 million
2. Blue Cross and Blue Shield of South Carolina (South Carolina): $6.5 million
3. Aetna Health Inc. (DC): $6.4 million
4. Anthem Insurance Cos. Inc. (Indiana): $6.2 million
5. Neighborhood Health Plan Inc. (Massachusetts): $6.1 million
6. UnitedHealthcare Insurance Co. (Oklahoma): $5.5 million
7. Time Insurance Co. (Texas): $4.5 million
8. Anthem Health Plans of Kentucky (Kentucky): $4.4 million
9. United HealthCare Insurance Co. (North Carolina): $4.4 million
SNL Insurance, which analyzed publicly available data from the Centers for Medicare and Medicaid Services, also found geographic anomalies.
On average, health insurance consumers in Florida and Maryland received the highest levels of refunds statewide, while Vermont brought up the rear.
However, when considering the largest ratio of refunds to health premiums earned, Montana took the top slot.
California was not considered “because most companies in the state do not file with the NAIC,” SNL added, stating that the data is not comparable.
In total, the Department of Health and Human Services estimates that carriers will send out $330 million in rebates to policyholders this summer. Those carriers have already returned about $9 billion to consumers since the ACA was passed in 2010.