Washington, D.C. — Consolidation in health care has left patients with fewer choices and higher costs.
A new Center for American Progress analysis explores how reforms to the medical loss ratio, the share of premium dollars insurers must spend on patient care, can reduce incentives for consolidation that increase health care coverage costs for Americans.
“Vertical consolidation in health care demands new approaches to consumer protections,” said Natasha Murphy, director of Health Policy at CAP and one of the authors of the analysis. “By reforming the medical loss ratio, policymakers can reduce conglomerates’ self-dealing, increase transparency, and make sure premium dollars go to patient care, not profits.”
To update the medical loss ratio, the analysis recommends:
- Greater transparency: Requiring public reporting on insurer ownership structures and financial flows between affiliated entities to expose how consolidation affects costs and patient access.
- Guardrails on internal payments: Setting benchmarks for what insurers can pay their own subsidiaries so inflated charges don’t count as medical spending.
- Structural separation: Considering a prohibition on insurers from owning providers or pharmacies to eliminate conflicts of interest and prevent self-dealing.
Read the analysis: “Medical Loss Ratio Reform Can Help Curb Corporate Power and Lower Health Care Costs” by Andrés Argüello and Natasha Murphy
For more information or to speak with an expert, please contact Christian Unkenholz at [email protected].