MLR was designed to leverage insurance company profits and administrative expenses. Reality is all we have seen from MLR is an increase in profits and expenses. Here are the facts:
- From the US Census Bureau: for 2011 to 2012 the number of people purchasing private insurance has remained flat at roughly 197,300,000.
- According to ehealthinsurance and The Kaiser Family Foundation average premiums in 2011 were around $3600 per person (from group and individual policies by family and single I came up with this very conservative number)
- According to Aon average increases in premiums from 2011 to 2012 were 7% (conservative again)
2011 total premiums: $710 Billion
2011 rebates issued: $1.3 Billion
2012 total premiums: $760 Billion
2012 rebates issued: $500 Million
So, thanks to MLR, insurance companies took in an additional $50 Billion in 2012 and paid out $800 Million less in rebates.
Only in Washington is this "savings".