Blue Cross Blue Shield of Massachusetts (BCBSMA) exceeded federal standards by $396 million and state standards by $242 million in the amount it spent on medical benefits on behalf of its members in 2012.
“We work hard to keep our premiums as low as possible and we’re proud that in 2012, we were able to exceed both state and federal standards for the percentage of premiums that health plans must spend on medical care for their membersâ€
“We work hard to keep our premiums as low as possible and we’re proud that in 2012, we were able to exceed both state and federal standards for the percentage of premiums that health plans must spend on medical care for their members,†said Allen Maltz, Chief Financial Officer of Blue Cross Blue Shield of Massachusetts. “It’s worth noting that Massachusetts standards are the highest in the nation. Our ability to exceed the standards last year reflects our disciplined approach and commitment to appropriately pricing premiums to the cost of the benefits and to keeping our medical and administrative costs low.â€
Massachusetts state and the federal government began requiring health insurers to meet certain spending medical loss ratio (MLR) levels for medical benefits in 2011. MLR is an easy way to see what percentage of every premium dollar goes toward medical expenses, and what percentage goes toward administrative expenses. This is the second consecutive year that BCBSMA exceeded both the state and federal standards.
The Affordable Care Act (ACA) requires insurers to meet specific MLR goals. Under the ACA, the federal medical loss ratio requirements are: