Data Note: 2020 Medical Loss Ratio Rebates – Methods – 9346-02

We analyzed insurer-reported financial data from Health Coverage Portal TM, a market database maintained by Mark Farrah Associates, which includes information from the National Association of Insurance Commissioners. The dataset analyzed in this report does not include NAIC plans licensed as life insurance or California HMOs regulated by California’s Department of Managed Health Care; in total, the plans in this dataset represent at least 80% of the individual market. All figures in this issue brief are for the individual health insurance market as a whole, which includes major medical insurance plans and mini-med plans sold both on and off exchange.

Total rebates are based on preliminary estimates from insurers. Since 2014, the total rebate amount issued across the individual, small group and large group markets has varied by 3 to 5% from insurer estimates. At the market level, the difference between estimates and actual rebate totals have been more volatile. Since 2014, individual market estimates have varied by as much as $34 million, or over 20%, as compared to the final actual rebates reported in December of the year following the applicable MLR reporting period. In some years, final rebates are higher than expected and in other years, final rebates are lower.