By using this site, you agree to the Privacy Policy and Terms of Use.
Accept
Health Works CollectiveHealth Works CollectiveHealth Works Collective
  • Health
    • Mental Health
  • Policy and Law
    • Global Healthcare
    • Medical Ethics
  • Medical Innovations
  • News
  • Wellness
  • Tech
Search
© 2023 HealthWorks Collective. All Rights Reserved.
Reading: Improving the Affordable Care Act by Modifying the MLR Rule
Share
Notification Show More
Font ResizerAa
Health Works CollectiveHealth Works Collective
Font ResizerAa
Search
Follow US
  • About
  • Contact
  • Privacy
© 2023 HealthWorks Collective. All Rights Reserved.
Health Works Collective > Policy & Law > Health Reform > Improving the Affordable Care Act by Modifying the MLR Rule
Health ReformPolicy & LawPublic Health

Improving the Affordable Care Act by Modifying the MLR Rule

DavidEWilliams
DavidEWilliams
Share
3 Min Read
minimum medical loss ratio
SHARE

minimum medical loss ratioThe Affordable Care Act is a big step in the right direction, but like any big complex new thing (think 787 Dreamliner) there are likely to be hiccups coming out of the gate. I’d like to see us learn from implementation of the law and make improvements along the way. Unfortunately many opponents take the opposite view – and would still rather repeal the whole law or resist implementation.

minimum medical loss ratioThe Affordable Care Act is a big step in the right direction, but like any big complex new thing (think 787 Dreamliner) there are likely to be hiccups coming out of the gate. I’d like to see us learn from implementation of the law and make improvements along the way. Unfortunately many opponents take the opposite view – and would still rather repeal the whole law or resist implementation. For example, Eric Cantor is again vowing a House vote on full repeal, states are rejecting the Medicaid expansion and having the federal government run insurance exchanges in their states rather than doing it themselves.

In the spirit of improving the law, I’d like to see a modification to the minimum medical loss ratio rules for health plans. Under the law, plans have to spend at least 80 percent (individual and small group) or 85 percent (large group) of premiums on medical costs. On the positive side this ensures that health plans use their resources on medical care and reduces incentives to restrict access, but it also limits the incentives for health plans to contain costs. After all, if medical costs are contained “too much” then the plan has to pay a rebate.

But we really should want plans to contain costs: by negotiating hard with providers, by introducing better network designs, and improving payment methodologies. Plans should be rewarded financially for doing this.

More Read

Why Tablets Are the New Frontier for In-Home mHealth
High Quality, Low Cost HealthCare Video Interview Series: Kelly Tappenden and The Alliance to Advance Patient Nutrition
Study: Medicaid Coverage ‘Substantially’ Improves Access to Care
Coming: A Two-Tiered Health Care System
Study Finds Nursing Homes Have Inadequate Care and Discharge Planning

One way to make it happen would be to let plans with a strong track record of cost containment escape the MLR, at least partially. For example, if a plan raised its premiums by less than the market rate or less than some external benchmark such as the Consumer Price Index, it could be allowed to have a lower MLR –and higher profit margin. That would encourage plans to do a better job of holding the line on costs because it would be the surest route to enhanced profitability.

(image: medical loss ratio rules / shutterstock)

Share This Article
Facebook Copy Link Print
Share

Stay Connected

1.5kFollowersLike
4.5kFollowersFollow
2.8kFollowersPin
136kSubscribersSubscribe

Latest News

dental care
Importance of Good Dental Care for Health and Confidence
Dental health Specialties
October 2, 2025
AI in Healthcare
AI in Healthcare: Technology is Transforming the Global Landscape
Global Healthcare Policy & Law Technology
October 1, 2025
Choosing the Right Swimwear for Health and Safety
News
September 30, 2025
sports concussions
Concussion In Sports: How Common They Are And What You Need To Know
Infographics
September 28, 2025

You Might also Like

ball-1106910_1280
DiagnosticsMedical DevicesPolicy & LawTechnology

Machine Learning: The Future for Health Plans

March 4, 2016
Medical Ethics

It’s All the Doctors’ Fault

September 14, 2011
fixing healthcare
BusinessHealth ReformPublic Health

Are Epiphanies the Key to Fixing Healthcare?

March 2, 2015
Mobile For Healthcare
Health careMobile Health

How to Merge Healthcare with Mobility?

November 6, 2017
Subscribe
Subscribe to our newsletter to get our newest articles instantly!
Follow US
© 2008-2025 HealthWorks Collective. All Rights Reserved.
  • About
  • Contact
  • Privacy
Welcome Back!

Sign in to your account

Username or Email Address
Password

Lost your password?