Most investors consider Medical Loss Ratio as the most important factor to gauge an insurance company’s present and future profitability. On December 2, 2011, HHS released its final ruling on the Affordable Care Act’s Medical Loss Ratio policy. Beginning 2012, the revised policy guarantees tax-free rebates to consumers if the percentage of premium spent on medical care and quality improvement by their insurers, falls below 85% in larger group insurance sectors and below 80% in the small and individual insurance markets.
Visible impacts of ACA’s standardized Medical Loss Ratio ruling
Availability of precise data
Before the latest MLR ruling, it was difficult to obtain financial reports or enrollment data for individual, small groups and large group markets, even more so at the state level. Unavailability of data made comparison among health plans difficult which further made the insurance process seem impervious. The Supplemental Health Care Exhibits documents issued by NAIC requires uniform reporting standards to be followed that will make it easier to: