On May 24, U.S. Senate Commerce, Science, and Transportation Committee Chairman John Rockefeller’s (D-WV) staff released a report examining the potential impact of health reform’s medical loss ratio (MLR) requirements.  The report found that, had the rules been in effect in 2010, consumers in every state would have received rebates from their insurers for failure to meet MLR requirements, resulting in a total of $2 billion in rebate payments.  The authors found that over 50 percent of individual market health plan beneficiaries would have received rebates in 2010.  In addition, the report estimates the impact of excluding insurance agent and broker commissions from MLR calculations, as H.R. 1206 would do, finding that it would have reduced 2010 rebates by 60 percent.

From the report:

The minimum medical loss ratio (MLR) provision included in the 2010 health care reform law requires health insurance companies to disclose detailed information about how they use their customers’ health insurance premium dollars. Over the past several months, health insurance companies have been filing this financial information for the first time with the National Association of Insurance Commissioners (NAIC). A preliminary analysis of these data performed by an NAIC working group has found that if the MLR law’s rebate provisions had been in effect in 2010, American consumers in all 50 states would have received rebates totaling almost $2 billion from their health insurance companies. The NAIC analysis also shows that these consumer rebates would have been reduced by more than $1.1 billion (or more than 60%) if agent and broker commissions were excluded from the MLR calculation.

Full Report: Consumer Health Insurance Savings under the Medical Loss Ratio Law (PDF | 291 KB)

U.S. Senate. (2011). Consumer health insurance savings under medical loss ration law.