KFF April 12, 2021
The Medical Loss Ratio (MLR) provision of the Affordable Care Act (ACA) limits the amount of premium income that insurers can keep for administration, marketing, and profits. The ACA requires health insurers to publicly report the portion of their premium dollars spent on health care costs, quality improvement, and other activities in each state they operate in. MLR rebates are based on a 3-year average, meaning that 2021 rebates will be calculated using insurers’ financial data in 2018, 2019, and 2020. Rebates issued in 2021 will go to consumers who were enrolled in rebate-eligible plans in 2020.
Using preliminary data reported by insurers to state regulators and compiled by Mark Farrah Associates, we find that insurers estimate they will...
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