Filed Under:Health Insurance, Individual Health

TAHU: PPACA MLR Rebates Show Plan Costs Not the Problem

(AP Photo/US Mint)
(AP Photo/US Mint)

The head of the Texas Association of Health Underwriters (TAHU) has put out a statement arguing the early medical loss ratio (MLR) rebate estimates support the argument that high administrative costs are only a small part of the U.S. health care cost problem.

Joanna Antongiovanni, president of TAHU, Dallas, released the statement in response to an MLR rebate estimate report from analysts at the Henry J. Kaiser Family Foundation, Menlo Park, Calif.

The Kaiser analysts are predicting that 3 million U.S. health insurance customers will split about $1.3 billion in health insurance MLR rebates.

An employer who receives a rebate might get back an average of just $127 for each covered employee, Antongiovanni says, citing the Kaiser analysis.

The rebate would be small change compared with the typical annual premium of $5,400 for employee-only coverage and $15,100 for family coverage, Antongiovanni says.

Drafters of the Patient Protection and Affordable Care Act of 2010 (PPACA) included the minimum MLR provision in PPACA in an effort to make sure health insurance policyholders were getting good value for their money.

The provision requires that health insurers spend at least 85% of large group revenue and 80% of individual and small group revenue on health care and quality improvement efforts or else makeup the difference by sending customers rebates.

Insurers are supposed to complete submitting MLR filings by June 1.

Kaiser analysts emphasized that the rebates could total more than $1 billion.

Antongiovanni says the small size of that figure relative to what individuals and employers pay for coverage shows that health plan and health insurer administrative costs account for a relatively modest percentage of health care costs, and that excessive administrative costs account for a very small share of total costs.

"Without addressing the true cause of increasing rates, the actual cost of care, we will be ineffective in solving the health care conundrum in our country," Antongiovanni says.

Featured Video

Most Recent Videos

Behind the scenes with Vicki Gunvalson [VIDEO]


In this exclusive interview, Vicki Gunvalson shares how she built a $15 million a year annuity business by planning for...

Regulator: Market may need to reinvent LTCI


Cioppa says Maine's governor wants to spur the creation of better products.

Dementia: It's more than Alzheimer's


An association calls for policymakers to remember lesser-known neurodegenerative conditions.

Protesters Disrupt WellPoint Annual Meeting


Hecklers call for more disclosures of information about political contributions.

Related resources

More Resources


Power your business with up-to-the-minute insurance news, analysis, and best practices from LifeHealthPro Daily eNewsletter – FREE.

Power your business with LifeHealthPro Daily eNewsletter – FREE.

Enter a valid email address.
Nichole Morford

Nichole Morford
Managing Editor

Thank you for subscribing to LifeHealthPro Daily!

Check Out More eNewsletters Now! Close

Advertisement. Closing in 15 seconds.