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Question - Do an internet search on Medical Loss Ratio and spend a few minutes reading about it. Under the Health Care Reform law, insurers and HMOs have to pay rebates to policyholders if they don't meet an MLR standard of at least 80 percent (for individuals and small groups) or 85 percent (for large groups).
Here is an example: Look at Aetna's 2015 annual report at the following link: Aetna Reports, Filings and Statements. On page 82 of the annual report (page 88 of the Adobe file) you'll find the income statement. It shows they collected Health Care Premiums of $51,618 and spent Health Care Costs of $41,712. That is about 81%. Thus, for every dollar collected in premiums, they paid out 81 cents in benefits.
Look up the annual report and income statement (again, actual income statement-no aggregators) of a publicly-traded health insurance company. Calculate their Medical Loss Ratio. Which benchmark (80%/85%) applies to them? Are they within the guideline?
Post a link to the income statement you are using.
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