Do an internet search on Medical Loss Ratio (MLR) and spend a few minutes reading about it. Under the Health Care Reform law, insurers and HMOs have to pay rebates to policyholders if they don't meet an MLR standard of at least 80 percent (for individuals and small groups) or 85 percent (for large groups).
Here is an example: Look at Aetna's 2017 annual report at the following link:
Aetna Annual Financial Reports
Click on "2017 Form 10K" to download the report.
On page 88, you'll find their income statement. It shows they collected Health Care Premiums of $52,022 and spent Health Care Costs of $42,753. That is about 82%. Thus, for every dollar collected in premiums, they paid out 82 cents in benefits.
Look up the annual report and income statement (again, actual income statement—no aggregators) of a publicly-traded health insurance company.
Calculate their Medical Loss Ratio. Which benchmark (80%/85%) applies to them? Are they within the guideline?
Post a link to the income statement you are using, including page numbers. Put the company name in the header of your post. Each student should pick a different company.
The Following Are Examples of Public Health Insurance Providers subject to the ACA, not an inclusive list of all companies:
Anthem
United HealthCare
Cigna Corporation
BCBS of Massachusetts
BCBS of Michigan
Humana
Molina
Wellcare Health Plans
Centene Corporation
Aetna
The following are examples of supplemental health insurance providers NOT subject to the ACA and therefore cannot be used for this discussion:
Metlife
AFLAC
Mutual of Omaha
Or any other company that only issues supplemental policies
