Connecticut official, exchange board mull 85% minimum MLR for individual, small group insurers
Barnes’ proposal would go beyond that, requiring that administrative costs for insurance plans on the individual and small group markets also be limited to no more than 15 percent of the money collected in premiums.
The proposal was intended to lower premiums at a time when many people are concerned about how much insurance will cost beginning next year, when many provisions of Obamacare take effect.
“I’m deeply concerned that the success of the Affordable Care Act nationally and in Connecticut will be undermined if there is rate shock that so many people have called on,” Barnes said.
This proposal invokes the right of states under Section 2718(b)(1)(a)(ii) of the Patient Protection and Affordable Care Act to set a minimum medical loss ratio (MLR) for payers above the 80 percent level specified in the law for individual and small group plan issuers. It would effectively standardize Connecticut’s minimum MLR ratio — the portion of plan issuer revenues that go toward paying medical claims — at a uniform 85 percent across all market segments. That is the minimum MLR specified in the ACA for the large group market. The ACA also provides that the minimum individual and small group MLR adopted by a state is subject to adjustment by the federal Health and Human Services Department if it determines its use would destabilize the state’s individual health insurance market.