The medical loss ratio provision of the Affordable Care Act, which requires insurers to spend at least 80% of the money they collect from premiums on improving medical care, is a source of constant controversy throughout the country. Insurers have claimed that the rule cripples their ability to remain financial solvent in the current economic climate. The Government Accountability Office has released a new report countering the claims from the insurance industry. The report shows that most all insurance companies in the U.S., both large and small, are able to meet the federal rule while still generating a decent profit.
Insurers have been opposed to the medical loss ratio rule since the passage of the Affordable Care Act in 2010. The concerns of insurers are backed by state legislators who are looking to obtain waivers from the federal government that would make insurance companies immune to the rule. Some states have been granted such waivers, but most others have been rejected. The Department of Health and Human Services, the agency that oversees the dolling out of waivers, says that insurers in states rejected were fully capable of meeting the rule.
The Government Accountability Office’s report shows that 77% of large-group insurance companies and 70% of smaller insurance companies were capable of exceeding the federal requirements. Of those, 64% were willing to adhere to the new rule. In the individual market, roughly 43% of insurers were willing to submit to the medical loss ratio provision.