The area’s three major health insurance companies in 2013 all exceeded federal standards for how much of the premium dollars they collect must be spent on medical benefits for their members, the insurers reported Tuesday.
HealthNow New York, the Buffalo-based parent of BlueCross BlueShield of Western New York; Independent Health of Amherst, which files reports for Independent Health Association and Independent Health Benefits Corporation; and Rochester’s Excellus, which operates in this area as Amherst-based Univera Healthcare, last year all met the minimum federal standard of spending on medical care and health services. That standard is known as medical loss ratio, or MLR.
Health plans are required under the federal Affordable Care Act to provide an accounting of how they spend their premium dollars, and states set their own standards as well. For the first time this year, insurers were required to report composite data for the previous three years.
Insurers, including some elsewhere in the country, that don’t meet the minimum standards are required to issue rebates to their members.
The federal reporting guidelines are broken down into three areas: large group, small group and individual plans.
For individual, direct-pay plans, insurers are required to spend 82 percent of premium revenues on their customers’ medical benefits. Last year in that category, HealthNow spent 99.8 percent, Excellus spent 94.2 percent and Independent Health Association spent 125.9 percent, the companies reported. (The benefits corporation doesn’t issue individual plans.)
For small-group plans, federal regulations require health plans to spend the same 82 percent of premium revenues on medical services for those customers. HealthNow had an MLR of 96.5 percent in that category last year, while Excellus reached 91 percent, Independent Health Association was at 86.2 percent and its benefits corporation was at 97.5 percent.
And for large group plans, the minimum MLR under federal guidelines is 85 percent. HealthNow last year had 90.2 percent, Excellus had 91.8 percent, Independent Health Association reached 86.2 percent and the benefits corporation was at 85.6 percent.
Overall, Excellus collected $3.9 billion in premium revenues last year and paid out $3.6 billion in medical benefits for its members, or $292 million more than if it had simply met the minimum federal and state standards.
HealthNow, for its part, collected $1.41 billion in commercial premium revenues in 2013 and paid $1.29 billion in benefits for its members, or $99 million more than if the company had matched the minimum standards.
Independent Health wasn’t immediately able to provide comparable data for its association and benefits corporation.