Got a carrier response this AM on MLR's. Seems HHS still hasn't decided what to include or how to calculate.
Not surprising.
When I was in the medical reinsurance biz most carriers had no idea how to monitor their business. They would generate loss runs for the intermediaries and reinsurer's but had no clue what they meant. When told by the reinsurer rates had to be increased, often they would refuse. This led to deteriorating blocks which then would sometimes lose the reinsurance.
The result was a whipsaw effect with carriers entering the market then quickly leaving a few years later.
We still see some of that but nothing like the 80's to mid 90's or so.
The mandated loss ratio's will supposedly include paid claims plus IBNR but the fed has yet to define it. There is speculation the MLR will be adjusted by carrier based on their block and possibly other adjustments by state.
But so far, they just don't know what DC will do.
Of course, neither does DC.
Not surprising.
When I was in the medical reinsurance biz most carriers had no idea how to monitor their business. They would generate loss runs for the intermediaries and reinsurer's but had no clue what they meant. When told by the reinsurer rates had to be increased, often they would refuse. This led to deteriorating blocks which then would sometimes lose the reinsurance.
The result was a whipsaw effect with carriers entering the market then quickly leaving a few years later.
We still see some of that but nothing like the 80's to mid 90's or so.
The mandated loss ratio's will supposedly include paid claims plus IBNR but the fed has yet to define it. There is speculation the MLR will be adjusted by carrier based on their block and possibly other adjustments by state.
But so far, they just don't know what DC will do.
Of course, neither does DC.
