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The statute imposes several levels of sanctions for failure to meet the minimum MLR requirement, including remittance of funds to CMS, a prohibition on enrolling new members, and ultimately contract termination.
Page 78 of "Maximize Your Medicare"
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As of August 2012, insurance companies have been required to issue refunds if claims did not represent a ratio of premiums (less regulatory costs).
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I do not have an easy way to prove that this requirement was part of ACA. Perhaps I am mistaken about that.
The rebates are real!
(From the rebate check explanation: "Based on this year's review of your Medicare Supplement policy, we are refunding a portion of the premium you have paid. ..."
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I am apparently too new to be allowed topost a link. I tried to link to CMS.gov.
You can do google search for:
medical loss ratio premium refunds august 2012
The title of that cms.gov page is: Medical Loss Ratio: Getting Your Money's Worth on Health Insurance
Quoting from the cms.gov page:
Thanks to the Affordable Care Act, consumers will receive more value for their premium dollar because insurance companies will be required to spend 80 to 85 percent of premium dollars on medical care and health care quality improvement, rather than on administrative costs, starting in 2011. If they don’t, the insurance companies will be required to provide a rebate to their customers starting in 2012.
(It is amazing to see how any mention of ACA can generate such unkind responses.)