FACT SHEET
Benefits of the Medical Loss Ratio Rules
for Women
JULY 2012
Before passage of the Affordable Care Act (ACA),
insurance companies were free to spend large
portions of consumer premiums on administrative
On average, the rebates dispersed
costs and profits – rather than on health care.
in August 2012 will be $127 per
Thanks to the ACA, women are now getting more
person and will total nearly $1.3
insurance coverage for their dollar as new rules
require insurers to spend at least 80 percent of
billion.
premiums on patients. When these “Medical Loss
— Henry J. Kaiser Family Foundation
Ratio” or “MLR” requirements are not met,
insurance companies must refund consumers a
portion of their premium to make up the difference.
It’s estimated that consumers and businesses will
receive rebates totaling nearly $1.3 billion by August 2012.
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Women will benefit significantly from the new MLR
requirements
Starting in 2011, all health insurers were required by the ACA to spend at least 80 percent of
premiums on medical care and quality improvement activities, limiting how much of
premiums can be spent on profits and administrative costs, like marketing.
 Before the ACA, more than 20 percent of consumers who purchased coverage in the
individual market were in plans spending more than 30 cents of every premium dollar
on administrative costs.2
 Insurance companies selling health insurance to large employers must now spend at
least 85 percent of premium dollars on medical care and quality improvement
activities. Individual and small employer health coverage must meet an 80 percent
MLR.
 The ACA also protects consumers by requiring insurance companies to publicly report
on their total earned premiums, reimbursement for clinical services, spending on
quality improvement activities and spending on all other non-claims costs excluding
federal and State taxes and fees.3
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Insurance companies that do not meet the medical loss ratio standard are required to
provide rebates to their consumers.
 In 2011, the new rules protected up to 74.8 million insured Americans, and estimates
indicate that up to 9 million Americans could be eligible for rebates in 2012.
 The first round of consumer rebates was sent out by August 1st 2012.
 The average estimated rebate is $127 per person and will total nearly $1.3 billion.4
Subsequent rebates will be paid by August 1st each year.
 Each enrollee will receive a rebate that is proportional to the premium amount paid
by that individual. For employer-sponsored plans, rebates will be sent to the
employer who will share the savings with
their employees.
 Rebates may take different forms,
including:
To calculate your rebate, use the
CCIIO calculator:

A reduction in future premiums;

A rebate check; or,

If the enrollee paid by credit card or
debit card, a lump-sum reimbursement to the same account that the enrollee
used to pay the premium.
http://companyprofiles.healthcare.gov/
These new rules are particularly important because of discriminatory price practices that
have required women to pay higher premiums than men for the same coverage.
 The vast majority of insurance companies in the individual market practice gender
rating – charging women more than men for the same policy – which could cost women
approximately $1 billion a year.5
 Gender rating exists even in plans that do not include maternity coverage and the price
difference for men and women can vary significantly for similar plans in the same state.

This also occurs in the group market as insurers demand higher premiums from
businesses with predominantly female workforces.
6
 Because rebate amounts will be proportional to the premium amount paid by an
individual, women facing higher-than-average premiums due to gender rating will
receive higher rebates when insurers fall short of the target MLR.
Many women have already begun to see their premiums go down as insurers make
adjustments to comply with the MLR requirements.
 For instance, in May 2011, Aetna announced that it would decrease individual market
premiums in Connecticut by an average of 10 percent in response to the MLR
requirement.7
 Such changes mean that women and families will benefit from more affordable options
when they are making decisions about what plan to purchase to best meet their needs.
NATIONAL PARTNERSHIP FOR WOMEN & FAMILIES | FACT SHEET | BENEFITS OF THE MEDICAL LOSS RATIO RULES FOR WOMEN
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1 Kaiser Family Foundation, http://www.kff.org/healthreform/upload/8305.pdf
2 http://www.healthcare.gov/news/factsheets/2010/11/medical-loss-ratio.html
3 http://www.healthcare.gov/news/factsheets/2010/11/medical-loss-ratio.html
4 Kaiser Family Foundation
5 http://www.nwlc.org/sites/default/files/pdfs/nwlc_2012_turningtofairness_report.pdf
6 http://www.nwlc.org/sites/default/files/pdfs/nwlc_2012_turningtofairness_report.pdf
7 http://www.ctmirror.org/story/12550/aetna-seeks-cut-health-insurance-rates
The National Partnership for Women & Families is a nonprofit, nonpartisan advocacy group dedicated to promoting fairness in the workplace, access to quality health care and
policies that help women and men meet the dual demands of work and family. More information is available at www.NationalPartnership.org.
© 2012 National Partnership for Women & Families. All rights reserved.
NATIONAL PARTNERSHIP FOR WOMEN & FAMILIES | FACT SHEET | BENEFITS OF THE MEDICAL LOSS RATIO RULES FOR WOMEN
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