June 18, 2013
The Medical Loss Ratio (MLR) standard of the Affordable Care Act requires health insurance companies to devote 80 or 85% of the premiums they collect to provide health care services to customers, after subtracting taxes and regulatory fees. If an insurer does not meet the MLR standards, it may pay rebates to its customers.
As a result of, among other things, strong expense management, collaboration with providers, and business innovations, Blue Cross and Blue Shield of New Mexico (BCBSNM), a division of Health Care Service Corporation, met or exceeded the MLR requirements for the vast majority of our customers in 2012. Less than 3% of our customers will receive a rebate.
These customers are part of the New Mexico small group market and will receive notification on MLR rebates, as well as the exact amount of any rebates. At this time, we anticipate that the one-time rebate may range anywhere from $5 to possibly a few hundred dollars this year. Given the inherently unpredictable nature of health care costs and utilization, it is not surprising that health plans may pay rebates to some customers in certain markets.
BCBSNM is part of a customer-owned organization that reinvests its earnings to benefit the health and wellness of its customers. The company does not distribute its profits to outside investors.
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