Health insurers' use of quality improvement expenses to achieve a minimum medical loss ratio requirement

Abstract

Health insurer medical loss ratios (MLRs) are the percentage of premium dollar spent on medical claims and healthcare quality improvement expenses (QIEs). QIEs include activities to improve patient health outcomes and safety, reduce medical errors, and prevent hospital readmissions. The Affordable Care Act mandates minimum MLRs in certain health insurance markets lest rebates be paid to policyholders. QIEs are reported in all markets regardless

Special issue on health insurer decision‐making

“…The other five papers in this issue address issues around the operation of insurance markets that involve “managed competition.” Three papers (Handel et al, 2023; Henriquez et al, 2023; Klein et al, 2023) analyze issues related to risk adjustment, which occur in systems where premiums are (partially) community rated and involve transfers from insurers who attract below‐average risk pools to those who attract above‐average risks. A fourth paper (P. H. Born, Tice Sirmans, et al, 2023), examines how health insurers adjusted their expenditures on quality improvement programs in reaction to regulations on minimum loss ratios under the ACA. In a fifth paper, Shepard and Forsgren (2023) investigate a constellation of conditions in the Massachusetts (the United States) health insurance marketplace that fall under the heading of “active purchasing” programs that seek to influence directly the plans available in the market to help control prices.…”