Insurers Spent Less Than 1 Percent of Premiums on Quality Improvement
March 25—Health insurance companies spent, on average, less than 1 percent of the premiums collected in 2011 on activities directly supporting improvement of healthcare quality, according to a Commonwealth Fund report.
The report looks at medical loss ratios (MLRs), consumer rebates, and quality improvement expenses in the aggregate and broken down by insurers’ corporate structure and ownership. It finds that insurers spent a combined $2.3 billion on direct quality improvement activities―an average of $29 per subscriber. The Affordable Care Act’s MLR rule requires insurers to spend at least 80 to 85 percent of premiums on medical claims and quality improvement activities, or else pay rebates to consumers.
Quality improvement expenditures among insurers varied substantially, from less than $12 to more than $40 per member, according to the report, Insurers’ Medical Loss Ratios and Quality Improvement Spending in 2011. Not-for-profit and provider-sponsored plans were more likely than for-profit and non-provider-sponsored plans to meet the ACA’s MLR requirement.
Publication Date: Monday, March 25, 2013