MLR Rebates

[AllenChicago]

According to the MLR Rebate rule for employers, they're not even required to give cash to contributing employees. They can grant "benefits", or temporary FUTURE premium relief.

REF: http://www.jdsupra.com/post/fileServer.aspx?fName=59b2ccb9-b7ad-48eb-bb12-b666804c6495.pdf

What a headache this can be for employers to caluclate what portion of the rebate they receive is attributable to which employee, in a given time-frame, and at what percentage. HHS also requires the rebating insurance company to "work with" the employer in calculating which employees are eligible and what share of the rebate eligible employees should receive.

Of course this rebate fiasco creates even more administrative overhead for health insurers, which sets the stage for them to have to pay out another MLR rebate the next year. I sure hope the SUPREME COURT has figured out just how rediculous the Affordable Care Act really is.
-ac

 

[ActuaryGuy]

Of course this rebate fiasco creates even more administrative overhead for health insurers, which sets the stage for them to have to pay out another MLR rebate the next year. I sure hope the SUPREME COURT has figured out just how rediculous the Affordable Care Act really is.
-ac

Not quite. The minimum loss ratio is still unchanged... so increased expenses will not cause more rebates.

Increased admin expenses do create pressure to lower other expenses .... like agent comp.

 

[somarco]

Increased admin expenses do create pressure to lower other expenses .... like agent comp.

Or fewer home office dudes and dudettes . . .

Frankly, if carriers want to write health insurance direct, go for it. Very few will be successful and most are already finding out their direct business model isn't generating the volume or saving money.

Even Blue, which can effectively market direct to carriers better than anyone realizes they can't do it alone.

 

[taterpeeler]

Not quite. The minimum loss ratio is still unchanged... so increased expenses will not cause more rebates.

Increased admin expenses do create pressure to lower other expenses .... like agent comp.

Are you a home office dude? If so be prepared for elimination...btw...I hate all home office yahoos.... Worthless as tits on a boar hog

 

[AllenChicago]

Or fewer home office dudes and dudettes . . .

I think that's what's happening with ASSURITY. Even though they're primarily a life insurance company, it's now taking 4 days for an application to make it to an underwriter.

The home office Dudette told me today that it's because they're SWAMPED with business. Assurity posted a multi-million drop in revenue last year, so I'm not buying her excuse.
-ac

 

[somarco]

Health insurance carriers have been laying off support staff since shortly after passage of Obamneycrap, in advance of MLR. With the cut in commissions they have attempted to write more direct business with minimal success. At least one carrier's in house direct sales staff has been dwindling over the last 6 months or so.

I don't know if carriers thought this was going to be a windfall or not but if so, they grossly misjudged.

 

[Yagents]

Anyone see HealthNet's stock yesterday, down 25%? They had a few large claims come in late in the quarter which pummeled their numbers. So much for allowed rate increases to preserve or increase their reserves. These companies are balancing a fine line....

 

[somarco]

MLR has no upside for carriers, only potential for losses. It is an incredibly stupid provision in an incredibly stupid law.

Large claims should be reinsured. They impact claims in the short run but are reversed when the reinsurer pays off.

 

[Yagents]

Here is an article, it was due to timing of claims, and a new system for claims The Catch: Strange Earnings | LifeHealthPro

 

[Crabcake Johnny]

MLR has no upside for carriers, only potential for losses. It is an incredibly stupid provision in an incredibly stupid law.

Large claims should be reinsured. They impact claims in the short run but are reversed when the reinsurer pays off.

Aetna thinks is just fantastic:-)