Health Insurers May Owe $1.1 Billion in MLR Rebates in 2024

Insurers that participate in the individual, small-group and large-group markets are estimated to pay a total of $1.1 billion in medical loss ratio (MLR) rebates to their customers in 2024 — falling short of record-high $2.5 billion in rebates in 2020 but staying similar to rebates levels in 2022 and 2023, according to a KFF analysis on preliminary data filed by insurers.

Under the Affordable Care Act, insurers that spend less than a certain percentage of their premium income on health care claims and quality improvement must rebate customers. Individual/small group plans must issue rebates if their MLRs fall below 80%, while the cutoff is 85% for large group plans. About half of the total rebate amount will go to individual market enrollees this year. Nearly $12 billion in rebates in total have been issued since the ACA required insurers to pay back excess profits to customers starting in 2012.