In 2006 when Massachusetts Health Insurance was passed and the individual and 2-50 marketplaces were merged, the Medical Loss Ration (MLR) was created. This ratio under this state law require health insurance plans to spend a set percentage of the premium dollars medical care and healthcare quality improvements.
As a result insurance companies have to need to forecast what they expect to spend in the next 12 months on claims and improvements then calculate their premiums to comply with 90% MLR requirement. If they spend less then 90% of the premiums on claims and improvements, they need to give a refund back to policy holders in the 1-50 marketplace.
It takes time to close out the books on claims and expenses but now the results for 2013 are starting to come in. Fallon, so far, is the only one who has failed the MLR test so far.
This may sound like a bad thing at first, to fail, but if you were a Fallon policyholder in 2013, you will be getting a check back (return of premium) to help Fallon meet the 90% test. That’s right, if you had Fallon in 2013 in the 1-50 markets, you will be getting a check in the mail.
If you have any questions on your health insurance plan, would like a quote from Fallon-Blue Cross-Tufts-Harvard or would like to learn more about Health Savings Accounts, send me an e-mail.