After all the squabbling about medical loss requirements under Obamacare, a Kaiser Health News editorial says there were no winners or losers:
Many consumers will never see a rebate under the proposed rules. But the goal of the MLR requirement is not to generate rebates but to drive insurers to spend less money on bureaucracy and more on health care. Consumers benefit if efficiently-run small insurers stay in the market and if a variety of types of plans remain available.
Recall Obamacare mandates that insurers post an 80% loss ratio on individual business and 85% on group business, and the whole debate was over how you define premium and how you define loss. I’ll just point out that most health insurers ran at a loss ratio above 80% before Obamacare. So the stakes were fairly low.
That said, insurers are glad there’s a credibility adjustment that gives them a bit of a cushion if random variation gives them a favorable loss ratio. And agents are sad that commissions are considered part of premium, because that limits their upside.