Medical loss ratios

Insurance carriers spend a substantial portion of their premium dollars on administrative costs, including overhead, executive salaries and product marketing.

Through the enactment of the Affordable Care Act, insurance companies are now required to submit data which indicates what portion of these premiums are spent on clinical services and quality improvement. This data is known as the medical loss ratio. Through these standards, insurance carriers are required to spend at least 80-85 percent of these premiums on medical care, as well as issuing rebates to enrollees if this percentage does not meet the minimum standards. Currently, insurance producer commissions are included in this medical loss ratio.

PIA National has been actively meeting with members of Congress to get the agent and broker compensation exempted from the medical loss ratio requirements. This is a fight that will continue into the coming legislative session.

Additional resources

PIA National: Opposition to HHS rule on agents in MLR grows: http://www.pianet.org/issues-of-focus/healthcare/2012/01-17-12-08