(with respect to healthcare insurance and specifically to individual market policies)

I already know (generally) how the Medical Loss Ratio (MLR) is calculated, what I'm specifically interested in is the granularity of the testing to determine if the required threshold has been met.

Skip ahead if it is already clear what I'm asking about. Otherwise: for example, Insurance provider "A" has been selling policies in all 67 counties in Pennsylvania. In some counties "A" has sold 4 different policies, in other counties "A" has sold 8 different policies.

When the time arrives to determine if "A" has achieved the required 80% MLR are:

  1. ALL policies aggregated together (irrespective of county or differences in policies) ?

  2. All policies sold within a specific county aggregated (irrespective of differences between policies) ?

  3. Is each policy tested independently?

I am not interested in hearing opinions about whether MLR is a good thing or a bad thing. Unfortunately personal contact with US HHS has been unsuccessful in finding an answer.

I am posting to politics because the information is useful in the US healthcare insurance reform debate.


1 Answer 1


From the CCIIO Technical Guidance: Questions and Answers Regarding the Medical Loss Ratio Interim Final Rule (PDF):

The experience of so-called mini-med policies (defined in the MLR IFR as policies with a total annual limit of $250,000 or less) is to be aggregated separately from other coverage, as stated in §158.120(d)(3). However, similar to other health insurance coverage and as specified in §158.120(a), it should be aggregated by State, and by large group, small group, and individual market within each State. There is no national aggregation or other variation from the aggregation rules set forth in §158.120 for mini-med policies.

So the Medical Loss Ratio (MLR) is broken out by

  1. Insurer.
  2. State (not county).
  3. Size of purchaser (individual, small group, large group).
  4. Type of plan (e.g. mini-med, expatriate, etc.).

It is however aggregated across policies within the groupings of these four categorizations. So two policies may fall in the same bucket or may not.

Mini-med plans were a legacy plan. They were given waivers to allow them to keep operating without meeting all the Obamacare standards. Their current status is unclear and probably worthy of its own question. Expatriate plans cover people who are out of country at least six months of the year.

Relevant section of the Code of Federal Regulations: 158.120.

I found the PDF on this page.

  • Understand the reason I asked about the possible county aggregation is because the policyholder can not purchase a policy being offered in an adjoining county, and yet (apparently) the same policy (same features) is being marketed at a different premium. - So somehow the two policies are treated differently. I am limiting the scope of my question to individual market, non-legacy, non-grandfathered, non-grandmothered plans from the same insurer using identical plan features (including be they HMo, EPO, or PPO)
    – BobE
    Commented Sep 7, 2017 at 3:44
  • After I found the link to the Xcel spreadsheet cms.gov/CCIIO/Resources/Forms-Reports-and-Other-Resources/…, it is plain that aggregation is performed statewide level. So the question remains why are policies marketed on a county level. maybe that should be my next question.
    – BobE
    Commented Sep 9, 2017 at 19:39

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