Author : Angela Keyu Lu
Publisher :
ISBN 13 :
Total Pages : 47 pages
Book Rating : 4.:/5 (129 download)
Book Synopsis The Impact of Medical Loss Ratio of Affordable Care Act by : Angela Keyu Lu
Download or read book The Impact of Medical Loss Ratio of Affordable Care Act written by Angela Keyu Lu and published by . This book was released on 2021 with total page 47 pages. Available in PDF, EPUB and Kindle. Book excerpt: In 2010, President Barack Obama enacted the Affordable Care Act (ACA) which significantly reformed the healthcare system. The Act obligated all people to have healthcare insurance or face a fine. Since medical insurances are expensive and commercial insurance companies are still the primary providers of medical insurance products in the market currently, it is a challenge to ensure that health insurance companies reduce premiums and decrease medical cost while providing quality service. Therefore, the literature review analyzed the content, influences, importance, and history of the medical loss ratio regulation so that audiences can understand the impact of the medical loss rate on medical insurance. The medical loss ratio (MLR) required that the insurance company spend 80%-85% of its premium on medical expenses, and any excess of the target percentage shall be rebated to policyholders. However, there is no need for the insurer to rebate if the amount is minimal. Also, through the Employer Health Benefits Survey analysis, it is concluded that the premium cost had increased every year from years of 2005 to 2020. Meanwhile, percentage change per year showed that although MLR has been implemented, the percentage change in 2011 decreased significantly compared with that in 2010. However, by the year 2013, the percentage change started to increase again, which showed that the medical loss ratio is still in effect, the rule still exists, but it has not been not effective in decreasing healthcare premiums. Moreover, before ACA-MLR was implemented, much of the premium was wasted because each state had different standards of the medical loss ratio. After ACA-MLR was implemented, many insurance companies were afraid to pay rebates due to this policy, and so they did their best to spend 80-85% of their premiums on medical expenses according to the requirement even when there was no obvious evidence that ACA- MLR could effectively reduce the premiums and cut the cost.