How Are Health Insurance Premium Rates Determined?

LAS VEGAS - March 11, 2024 - PRLog -- Your health insurance premium amount isn't random. A variety of factors affect how much you'll pay every month for your coverage.

The 80/20 Rule
Have you heard about the "Medical Loss Ratio"? This ACA (Affordable Care Act) provision is called the 80/20 rule and keeps your insurer from bringing in high profits from high premiums.

Insurance Companies Can't Gouge the Insured
The 80/20 rule states that a health insurance company must spend at least 80 percent of the money they bring in from premiums on actual healthcare costs/claims and activities to improve the quality of care. Twenty percent of the money they bring in from premiums can be used for administrative costs, marketing, and other overhead expenses. If they're selling policies to a large group of more than 50 employees, 85 percent of premiums must be spent on care and quality improvement.

If your health insurance company doesn't meet these requirements, then you will get some of your premium back in the form of a rebate. Rebates happen regularly. Not every year and not every insurance carrier, but in general, you may have one or more insurance companies needing to give back to their members, all because of this "Medical Loss Ratio".

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Nevada Insurance Enrollment
4260 W. Craig Road suite #150-A
North Las Vegas, NV 89032
(702) 898-0554
Website: NevadaInsuranceEnrollment.com