Provider-sponsored insurers, medical loss ratios, and quality ratings in ACA marketplaces.

INTRODUCTION

The Affordable Care Act's (ACA) medical loss ratio (MLR) regulation requires individual market insurers to spend at least 80% of premium revenue on medical care and quality improvement, but evidence is limited on whether MLRs correspond to measured quality and how this differs by insurer organizational structure.

METHODS

Using CMS MLR financial reports for ACA marketplace insurers (2015-2023) linked to Quality Rating System ratings (2020-2023), we compared provider-sponsored insurers owned by or operating as part of integrated delivery systems with traditional insurers on MLRs, spending components, and quality, using adjusted regressions.

RESULTS

Among 2751 issuer-state-years, 581 (21.1%) were provider-sponsored. Provider-sponsored insurers had MLRs 5.8 percentage points higher than traditional insurers (95% CI, 2.0 to 9.7). Provider-sponsored insurers had higher overall quality ratings (0.65 stars; 95% CI, 0.36 to 0.94), despite reporting $5.5 lower quality improvement expenses per member per month (95% CI, -8.9 to -2.2). A 10 percentage point higher MLR was associated with 0.15 higher stars (95% CI, 0.09 to 0.21). Prior-year, but not current-year, quality improvement expenses were associated with higher subsequent ratings (0.04 stars per $10 per member per month; 95% CI, 0.02 to 0.07).

CONCLUSION

Organizational structure may shape MLR interpretation; direct quality measures may complement MLR regulation.