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OIR Issues Statement on Premature MLR Calculation

OIR Issues Statement on Premature MLR Calculation

A recent report from the Kaiser Foundation indicated that health insurers will be required to issue millions of dollars in refunds because their medical loss ratios fall below new requirements.  However, the Florida Office of Insurance Regulation issued a statement pointing out that the report might be drawing conclusions from data that was not intended for that purpose.  The OIR responded as follows:

The NAIC Supplemental Health Care Exhibit (NAIC-SHCE) and the Preliminary Medical Loss Ratio included in this exhibit were reported to the NAIC on April 1. The NAIC has been very clear that this data was for informational purposes only as it pertains to solvency, and was not intended to be used to calculate potential MLR rebates. Such a calculation is impossible, since this exhibit does not include all claims needed for the MLR rebate calculation, nor does it contain statistical adjustments required under federal law. The official MLR reporting forms are due on June 1.

Although the NAIC and the Office believe it was inadvisable to use the April 1 data to make rebate estimations, the Kaiser Foundation has apparently issued a report based on their own proprietary methodology extrapolating from this data. Kaiser has not shared their methodology or findings with the Office, and therefore, we cannot comment on their methodology or findings. The NAIC and the Office would like to reiterate that it is premature to speculate on MLR rebates prior to the June 1 filings.