The Medical Loss Ratio (MLR)  is essentially the percentage of your premium that goes to paying medical claims.  Things that are excluded are administration and overhead, commissions, premium taxes, marketing costs, etc.  Health Care Reform requires a minimum of 80-85% (depending on group size) be paid to claims, and any “excess” to be refunded to the preium payors.  For example, if your plan had a 78% loss ratio, they would have to refund 2% to all the policy holders that year.

At the same time, all increases over 10% now have to ba approved at the state level.  While alot of states did not do this in 2012 (NJ, PA, MA, NH, OH, VA, GA, IL are among those), the “Calculated savings ” to consumers is pretty substantial.  THe largest “amounts saved” are

1- Washington State ($49. million)

2- California ($34.5 million)

3- New York ($20.2 million)

4- Michigan ($15.5 million)

5- Colorado ($11.3 million)

 

Source- Benefits Selling 12/12