Insurers Paid $1.5 Billion In Rebates In 2011 & 2012 Under PPACA Medical Loss Ratio Rules

In 2011 and 2012, health plan insurers paid consumers $1.5 billion in rebates because the plan failed to meet the medical loss ratio (MLR) benchmark for the percentage of premiums to be spent on direct health care services for the plan members or quality improvement initiatives. The MLR rebates are a provision of the Patient Protection and Affordable Care Act of 2010 (PPACA). Total rebates for 2012 were $513 million, half the amount paid out in 2011.

The PPACA provision set minimum MLR benchmarks ranging from 80% for individual and small group plans to 85% for large group plans . . .