CMS: Insurers Paid Out $2B In Medical Loss Ratio Rebates For 2020 Claims

Insurers gave out approximately $2 billion in rebates for 2020 to nearly 10 million consumers under the Affordable Care Act’s (ACA’s) medical loss ratio provision.

The Centers for Medicare & Medicaid Services (CMS) released Friday a list of insurers that sent out payments for the past year.

The ACA requires insurers to spend a certain percentage of a consumers’ premium payments on medical claims and the rest on administrative costs. The medical loss ratio is 80% for individual and small group market insurers and 85% for larger group plans.

A plan must send rebates to customers by Sept. 30 via either a premium credit, lump-sum check, credit card or direct debit.

“For the 2020 reporting year, health insurers provided approximately $1.3 billion in rebates in the individual market, $384 million in the small group market and $291 million in the large group market,” CMS said.

The CMS market breakdown estimate includes approximately 4.8 million people in the individual market and 5 million in the small and large group markets.

The $2 billion in rebates is well above the $1.3 billion insurers had to dole out for the 2019 plan year, according to a report from the Kaiser Family Foundation.

Insurers in 2020 dealt with much lower healthcare utilization due to the COVID-19 pandemic, which caused consumers to delay or forego care.

But the amount was below a $2.7 billion estimate Kaiser had predicted insurers would face for 2020.


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