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Medical Loss Ratio- a new way to find affordable health insurance in Santa Monica

Medical Loss Ratio – an estimated $ 1.3 Billion will be given back to customers , this a new way to find affordable health insurance  in Santa Monica.

Did you ever think the day would come when you would receive money back from your health insurance carrier?  By August, insurance companies will be required to issue consumer rebates if they were not in compliance with the Medical Loss Ratio (MLR)  part of the Affordable Care Act (ACA)  in 2011. Insurers offering health plans to individuals and small businesses must spend at least 80 percent of their premium income on health care claims and quality improvement activities; the other 20 percent or less can be used on administrative expenses such as marketing, products, earned profits for investors and commissions for agents. The MLR is higher for larger groups (85:15 percent).
According to the Kaiser Family Foundation, based on the preliminary estimates from insurers, rebates would total $ 1.3 billion this year , including $ 426 million in the individual market, $ 377 million in the small group market, and $ 531 million in the large group market.

In the individual market the average rebate is estimated at $ 127 per person per year. The average rebates vary substantially from state to state, and within states, by insurers. States like Hawaii, Maine and the District of Columbia will not have any rebates, whereas states such as Alaska ( $305 ), Maryland ($294), and Pennsylvania ( $243) are among the largest per-person rebate states.  For the small group market the average rebate is estimated at $ 76 per person per year, and in the large group market the average rebate is estimated at $ 14 per enrollee on an annualized basis. Unfortunately,  the exact data for California is not available, as the HMO’s are not required to report to the National Association of Insurance Commissioners ( NAIC).

The rebates of the Medical Loss Ratio, although not very large, are among the more tangible effects of the Affordable Care Act to be felt by consumers. One other effect  of the ACA is free preventive care, which many consumers are taking advantage of.
The presence of a Medical Loss Ratio and the rebate requirements have provided an incentive for insurers to seek lower premium increases. This indirectly has produced more savings for consumers and businesses alike. The new rate review procedures, in which states and the federal government review rate increases exceeding 10 %, also encourage insurers to moderate their premium increase requests. All major California insurance carriers showed premium increases under 10 % statewide. Anthem adjusted its rates from the original proposal of 10.4 % to 8.2%;  Blue Shield’s increases averaged 9.7 % and Aetna’s averaged 8 % .  While the MLR is helping consumers and businesses get greater value for their premium dollars, these rate controls still are not the solution to limiting the ever-increasing health care costs, which continue to drive the increasing health insurance premiums.

Furthermore, especially in California where the unemployment rate is still 11 percent, and the annual family income  mostly was stagnant over recent years, even a “so called low 8 percent health insurance increase” is a fundamental hardship for California’s families.

Barbara Kempen,  owner of Solid Health Insurance Services, will assist you in finding  affordable health insurance in Santa Monica that fits your health needs and also your financial budget for your family and business.

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