SNL Insurance: Mapping
Medical Loss Ratios
The Vermont health insurance
market is an interesting one to watch
for a number of reasons.
Within the individual market,
the state had one of the largest increases in direct premiums written in
2013, according to SNL data, with
growth of 15. 9 percent. This edged
out North Carolina’s 15. 2 percent
increase and Washington D.C.’s 14.8
percent growth. This data comes
from the Supplemental Health Care
Exhibit filed by P&C, life, and
health insurers in their annual statutory statements submitted to the
NAIC. There is one caveat, however: companies based in California do
not have to file with the NAIC and
therefore were not included in this
Vermont is further compelling in
light of its relatively large amount of
individuals who were eligible to en-
roll in a marketplace plan. Based on
data from the U.S. Department of
Health and Human Services, the state
had roughly 95,000 individuals who
were eligible as of May 1. Combined
with 2013 population data available
from SNL, this represents approxi-
mately 18. 1 percent of Vermont’s
population above the age of 15 and
about 26.1 percent of its population
above 35. Both ratios were the high-
est among the 50 states and Wash-
ington, D.C. As of May 1, roughly
38,000 individuals in Vermont had
selected a marketplace plan, accord-
ing to the HHS, or about 40 percent
of the eligible individuals.
The next-highest state, using the
same methodology, was Florida. The
HHS determined that about 1. 6 million Floridians were eligible to enroll
in a marketplace plan, which accounted for 10.0 percent of the population over 15 and 14.4 percent of
the population over the age of 35.
Based on the HHS data, approximately 61.3 percent of the eligible
individuals had selected a marketplace plan as of May 1.
Another way that Vermont stood
out in 2013 was in its medical loss
ratio. Vermont writers combined to
produce a relatively large medical
loss ratio in 2013 on business sub-
ject to the MLR rule, based on com-
putations performed by SNL. As of
the end of 2013, the statewide ratio
stood at 93.2 percent.
The MLR rule was created by the
Affordable Care Act and stipulates
that health insurers spend a specified
portion of the premiums they earn
on claims and quality improvement.
For individual and small group business, insurers must maintain a ratio above 80 percent, while for large
group business, the threshold ticks
up to 85 percent.
For the public, this compels insurers to spend more on claims and
healthcare improvement. For insurers, however, this means less
The full report and analysis is at
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