A Brief Summary of the 2023 Health Insurance Medical Loss Ratio and Rebates Results

 

February 27, 2025

The Medical Loss Ratio (MLR) provision established by the Affordable Care Act (ACA) requires health insurers who fail to spend specified percentages of their premium income on medical and quality care improvement expenses to pay rebates to their customers. The goal of this provision is to curb growth in health care premiums while ensuring that plans adequately cover healthcare expenses. In 2022, rebates to consumers were $947 million, benefiting 5.8 million customers.  For 2023, rebates increased slightly to $957 million, benefiting 6.1 million customers, equating to approximately $156 per beneficiary.

Key Details about the MLR

• The ACA provision for rebates based on MLR applies to commercial (risk) insurance lines and does not apply to self-funded plans.
• Beginning in 2014, rebate payments are determined by using an average MLR calculation using medical costs and premiums from the past three years.
• For Individual and Small Group segments, insurers must spend 80% of their premium funds on health-related expenses.
• For the Large Group segment, insurers must spend 85% of their premium funds on health-related expenses.

In January 2025, the Department of Health and Human Services (HHS) released the 2023 Medical Loss Ratio (MLR) data which includes MLR rebates due to consumers. Subscribers to Mark Farrah Associates’ Health Coverage Portal™ and/or the SHCE & MLR Data may access this important data with the benefit of NAIC company codes mapped to HIOS codes used for government reporting by health plans. In this Healthcare Business Strategy report, MFA summarizes key findings from the HHS report, with a focus on health plan performance as it relates to the Medical Loss Ratio and related rebates due to customers. 

State Focus

 

MLR premiums and rebate figures were aggregated for all health plans that reported doing business in each state. For 2023, Pennsylvania again led the country with over $126 million in MLR rebates, however this year’s rebates are down 43% from 2022. Arkansas’ $65 million in rebates represented a notable percentage of total adjusted premiums at 1.64%. Arkansas’ rebates were comparable to 2022. Missouri experienced a large upsurge from 2022, with additional rebates of $52.5 million, a 145% increase.

 

 

Total rebates paid for 2023 were $ 957 million, up only 1.1% from 2022. The table below shows which states had the greatest overall year-over-year decreases in aggregate MLR rebates paid by health plans, including Pennsylvania, California, Virginia, the District of Columbia, and Massachusetts. Overall, 18 of the 50 states experienced decreases in MLR rebates for 2023.

 

 

For this analysis, Mark Farrah Associates is reporting all data as filed with the Centers for Medicare & Medicaid Services (CMS) in the annual MLR reporting requirements, excluding Puerto Rico and the Virgin Islands. MFA is not adjusting the data to account for differences in the number of reporting plans between 2022 and 2023.          

Market Segment Analysis

MFA assessed the Individual, Small Group and Large Group comprehensive health insurance markets’ Adjusted Premiums, MLR rebates and Weighted Average MLRs for the leading companies. This helps to provide additional competitive insights into how companies are navigating the ACA-regulated health insurance markets. The next three sections will address findings in each segment.

Individual Comprehensive

 

 

MLR rebates paid in 2023 for the Individual comprehensive segment were $463 million which is 0.38% of the $123 billion collected in premiums for this segment. It is important to point out that for payment purposes, health insurance MLR rebates are calculated at the plan and state level. Centene leads all other companies in this segment with $263 million of rebates, or 1.33% of premium. Among the carriers with the largest Individual segment rebates, BCBS of LA had the highest MLR rebate as a percentage of premium, equaling 2.72%. Except for BCBS of LA, the remaining companies had average MLRs above the ACA-established 80% minimum for the segment, when all plans were combined.

 

 

The above table provides a look at the largest plans in the Individual segment for 2023, based on premiums, independent of MLR rebates paid. Centene led in this segment with over $19.7 billion in adjusted premiums. Centene’s weighted average MLR of 81.09% is the lowest among the segment leaders, and well below the average 88%. Kaiser’s 103.07% MLR was the highest among the leaders in this segment.

Small Group Comprehensive

 

 

MLR rebates for the Small Group segment in 2023 were $299 million, or 0.41% of the $74 billion segment premiums. Within this segment, Elevance again paid the highest volume of 2023 rebates with an aggregate outlay of almost $86 million, 1.09% of its adjusted premium. UnitedHealth ranked second with approximately $84 million in rebates which equated to 0.67% of its segment premiums. Each company’s MLR rebates are calculated at the plan and state level. Among the insurers with the largest MLR rebates, only UnitedHealth and BCBS of MA had company-wide average small group MLRs above the ACA-established 80% segment minimum.

 

 

The table above provides a look at the largest insurers in the Small Group segment. Healthcare Service Corp. (HCSC) and Kaiser were once again two of the larger players in this segment that incurred no rebates in 2023. Naturally, they each had average MLRs that were higher than most of the segment’s leading peers. Kaiser experienced the highest average MLR of almost 97.7% amongst the segment leaders.

Large Group Comprehensive

 

 

MLR rebates for the $262 billion Large Group segment in 2023 were $195 million. Within the segment, UnitedHealth paid the highest volume of MLR rebates, outlaying over $80 million, or 0.31% of premiums. Nippon Life’s $16 million in rebates ranked fourth, however, this equates to 7.03% of their segment premiums. Once again, the company’s MLR rebates are calculated at the plan and state level. Three of the top five companies required to pay Large Group rebates had average MLRs above the ACA-established 85% segment minimum.

 

 

The above table provides a look at the leading plans in the Large Group segment for 2023. While this is the biggest segment based on premiums, Large Group business generated the lowest amount of MLR rebate dollars in terms of percent of premiums with only 0.07% returned to customers.

Conclusion

For 2023, rebates paid to consumers remain a relatively small portion of total premiums. Average rebates paid to Individual segment customers for 2023 are $172 down from $196 for 2022. For the Small Group segment, the average rebate to customers increased from $201 in 2022 to $231 in 2023 as the segment has become more profitable overall for payers. Finally, the Large Group segment had rebates falling to $92 per member in 2023, from $104 in 2022.

SHCE & MLR Data

The data used in this analysis brief was obtained from Mark Farrah Associates' Health Coverage Portal™ as available from the Department of Health and Human Services. Each year, MFA updates its products with the latest MLR data. Additionally, MFA maintains financial data as well as enrollment and market share for the health insurance industry in the subscription-based Health Coverage Portal™.

Glossary

Weighted Average MLR – For analysis purposes, Mark Farrah Associates calculated average MLR weighted on the adjusted premiums for each company by segment. The MLRs used in the calculations are average ratios based upon 2023 data, as reported on line 5.4 and 5.8 of Part 3 of the HHS MLR and Rebate Calculation schedule.

Sources

Centers for Medicare & Medicaid Services

“Public Use File for 2023 (as of December 16, 2024)”

https://www.cms.gov/marketplace/resources/data/medical-loss-ratio-data-systems-resources

“MLR Refunds by State and Market for 2023” (as of December 16, 2024)”

https://www.cms.gov/marketplace/resources/data/medical-loss-ratio-data-systems-resources

About Mark Farrah Associates (MFA)

Mark Farrah Associates (MFA) is a leading data aggregator and publisher providing health plan market data and analysis tools for the healthcare industry. Our product portfolio includes Health Coverage Portal™, County Health Coverage™, Medicare Business Online™, Medicare Benefits Analyzer™, 5500 Employer Health ^PLUS, and Health Plans USA™. For more information about these products, refer to the informational videos and brochures available under the Our Products section of the website or call 724-338-4100.

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