Our Medical Loss Ratio Surpasses Requirements
The Patient Protection and Affordable Care Act (PPACA) requires insurers to meet specific medical loss ratio (MLR) goals. Under the Affordable Care Act, the federal medical loss ratio requirements are 85 percent for large groups, which means that at least 85 percent of every premium dollar goes toward medical expenses and 80 percent for small groups and individuals.
In Massachusetts, the requirement for small groups and individuals is even higher:
Under Massachusetts law, if an insurer's medical loss ratio is below the requirement, the company must issue rebates to the companies and people they insure. We will be issuing a separate document to be included in the EOC packages that our loss ratio of approximately 90 percent exceeded both state and federal medical loss ratio standards. Therefore, we will not be issuing rebates. Our ability to exceed the state and national standards reflects our commitment to offering the best possible value to our customers and to keeping our administrative costs as low as possible.
In July, we will be issuing the 2012 Patient Protection and Affordable Care Act survey, as well as the Medicare Secondary Payer survey, to determine group sizes. As noted above, the PPACA law requires Blue Cross Blue Shield of Massachusetts to calculate medical loss ratio standards for a given calendar year by market segment (individual, small and large group) and provide premium rebates for market segments that do not meet the minimum medical loss ratio standards. To do so, we need to categorize employers as "Small" or "Large" as defined by PPACA. These surveys are to prepare for the 2012 reporting year.
Learn more about medical loss ratio at www.HealthCare.gov.
This information is provided for informational purposes only and does not constitute legal advice. Please consult your legal counsel regarding your specific situation.
Please note that this content is only intended to describe national health care reform requirements under the Patient Protection and Affordable Care Act (PPACA). It does not address Massachusetts law requirements or the potential impact of Massachusetts law on federal PPACA requirements.
For purposes of PPACA implementation, Blue Cross Blue Shield of Massachusetts assumes the plan year is the policy year, unless an account notifies us otherwise.