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2024 Medical Loss Ratio Rebates

The Medical Loss Ratio (MLR) provision of the Affordable Care Act (ACA) regulates the portion of premium income that insurers must allocate to health care claims and quality improvement. Insurers failing to meet the mandated threshold must issue rebates to policyholders. Preliminary data indicates that insurers are projected to issue approximately $1.1 billion in MLR rebates across all commercial markets in 2024, bringing the total rebates issued since 2012 to an estimated $13 billion. While these rebates for 2024 are larger than those issued in recent years, they fall short of the record-high rebates observed during the pandemic in 2020 and 2021. Rebate calculations for 2024 are based on a three-year average, potentially impacting insurers with high profitability in previous years. Click here for article.

  • The ACA's MLR provision mandates insurers to allocate a certain percentage of premium income to health care claims and quality improvement.

  • Preliminary data suggests insurers will issue around $1.1 billion in MLR rebates for 2024, totaling an estimated $13 billion since 2012.

  • While 2024 rebates exceed recent years, they are lower than the record highs observed during the pandemic in 2020 and 2021.

  • Rebate calculations for 2024 are based on a three-year average, potentially affecting insurers' rebate obligations based on previous profitability.

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