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man holding millions of dollars Before the medical loss ratio rule came into effect, insurers could accumulate a reserve from low-claim years to pay for the claims in high-claim years.

“Liars figure, and figures lie.” When I was a kid, I remember seeing this on a plaque in the clubhouse of a golf course I worked at. Now, as an adult in the health care industry, these words really ring true.

Medical loss ratio, a part of the health care reform, requires insurers to spend a specified percentage (80% for small groups and 85% for large groups) of total premiums on medical costs and expenses that improve health care quality. If these requirements aren’t reached, the insurers must issue rebates to their customers.

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