Employers received approximately $344 million in rebates in 2016 due to ACA’s MLR provision

In 2016, employers in the small group market received approximately $153 million in rebates, and employers in the large group market received $191 million in rebates due to the Patient Protection and Affordable Care Act’s (ACA) medical loss ratio (MLR) provision, according to a report from the Centers for Medicare and Medicaid Services (CMS). Consumers in the individual market received approximately $103 million in rebates. In 2016, health insurance companies paid approximately $447 million in rebates.


The ACA requires health insurance issuers to submit data on the proportion of premium revenues spent on clinical services and quality improvement, known as the MLR. The ACA requires insurance companies to spend at least 80 percent or 85 percent of premium dollars on medical care, with the rate review provisions imposing tighter limits on health insurance rate increases. The CMS found that in 2016, the average MLR was 92.9 percent in the individual market, 86.1 in the small group market, and 90.3 percent in the large group market.

Rebates paid for 2016 will benefit approximately 3.9 million consumers across all three markets, the CMS noted. The average rebate per person is $114 in the individual market, $109 in the small group market, and $116 in the large group market.

SOURCE: https://www.cms.gov/CCIIO/Resources/Forms-Reports-and-Other-Resources/Downloads/Medical_Loss_Ratio_2016_Annual_Report.pdf
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