Affordable Care Act (ACA) 2018 Medical Loss Ratio (MLR) Rebates

What Is the ACA's MLR?

In general, the ACA’s MLR is the percentage of insurance premium dollars that a health insurer spends on health care services and expenses reported as activities to improve health care quality.

The ACA set MLR standards for health insurers. For the 2018 reporting year, the ACA's MLR standard for small group and large group markets in New Mexico is 85%. The ACA’s MLR standard for the individual market is 80%.

If an insurer's MLR doesn't meet or exceed the ACA’s MLR standard in a certain market segment of a state, the insurer may provide MLR rebates in that market.

MLR Rebates

Blue Cross and Blue Shield of New Mexico (BCBSNM) will provide MLR rebates in the New Mexico individual market because we didn’t meet or exceed the ACA's MLR standard in that market in 2018.

We will provide MLR rebates in the New Mexico individual market by Sept. 30, 2019.

BCBSNM met or exceeded the ACA’s MLR standards in the New Mexico small group and large group markets in 2018. As a result, no MLR rebates will be provided in those markets for 2018.

Key Questions About the ACA's MLR

Q. What is the ACA’s Medical Loss Ratio (MLR)?

A. In general, the ACA’s MLR is the percentage of premium dollars that a health insurer spends on health care services and reported as activities to improve health care quality for customers.

The ACA set MLR standards for health insurers. For the 2018 reporting year, the ACA’s MLR standard for small group and large group markets in New Mexico is 85%. The ACA’s MLR standard for the individual market is 80%.

If an insurer’s MLR doesn’t meet or exceed the ACA’s MLR standard in a certain market segment of a state, the insurer may provide MLR rebates in that market.

Q. For purposes of the ACA’s MLR, what types of activities are considered to be quality improvement activities?

A. Among other things, activities to improve quality of care are designed to improve health outcomes for members. For example, these activities may include:

  • Enhance patient safety
  • Promote health and wellness
  • Improve transparency
  • Support meaningful use of health information technology, or
  • Prevent hospital readmissions.

In general, these activities are aligned with criteria developed by professional medical associations, government agencies, accreditation bodies and other nationally recognized health care quality organizations.

Q. How is the ACA’s MLR calculated?

A. For purposes of calculating MLR, each state has an individual, small group and large group market. In general, the ACA's MLR is the percentage of insurance premium dollars that a health insurer spends on health care services and expenses reported as activities to improve health care quality.

The ACA’s MLR standard for small group and large group markets is 85%. The ACA’s MLR standard for the individual market is 80%.

The ACA's MLR calculation is based on a 3-year rolling average for each state and market segment.

Q. When will any MLR rebates be provided?

A. MLR rebates will be provided in the New Mexico individual market by Sept. 30, 2019.

Q. How will any MLR rebates be distributed?

A. In general, MLR rebates may be issued in the form of a check or premium credit.

Q. To which plans does the ACA’s MLR apply?

A. The ACA’s MLR standards apply to certain fully insured health insurance coverage in the group and individual markets. They don't apply to self-insured group health plans or to Medicare and Medicaid.

Q. Why are you providing MLR rebates in the New Mexico individual market?

A. We will provide MLR rebates in the New Mexico individual market because we didn't meet or exceed the ACA's MLR standard in that market in 2018.