In 2018, we exceeded the Affordable Care Act’s (ACA) medical benefit ratio (MBR) thresholds for medical spending in all required lines of business.
MBR is the percentage of premium dollars a health plan spends on direct care for patients and efforts to improve quality. For example, a ratio of 80% (or 80 cents) means the insurer is using the remaining 20% (or 20 cents) of each premium dollar to pay overhead expenses such as marketing, profits, salaries, administrative costs, and agent commissions.
- For the large group market, the threshold is 85%.
- For small group and individual markets, the threshold is 80%.
Insurers who don’t meet or exceed these thresholds must issue rebates to customers. Kaiser Permanente Washington exceeded both thresholds in 2018, which means we spent more on care and quality improvements than the ACA standard. We do not need to issue rebates to members.
As a not-for-profit health plan, we’ll continue to focus on high-quality member care and minimizing overhead expenses.