Analyst: MLR Rules Are Lowering Some Health Rates

The new Affordable Care Act medical loss ratio requirement may be leading to health insurance rate cuts in some communities, Charles Boorady says.

Boorady, a securities analyst in the New York office of Credit Suisse Securities (USA) L.L.C., has included that thought in a comment on April managed care plan renewals.

Few employers renew their health plans in April, but brokers and insurers are reporting that April renewal activity was softer than usual, Boorady says.

“We attribute weakness mainly to insurers cutting price in markets where a rebate would otherwise be paid to meet new minimum loss ratio requirements,” Boorady says.

Efforts to cut the commissions paid to agents and brokers could also cause problems for health plan renewals this year, Boorady says.