California: Individual Market enrollees won't get much, but Group Plan enrollees will receive $90 million in MLR rebates

MLR rebate payments for 2018 are being sent out to enrollees even as I type this. The data for 2018 MLR rebates won't be officially posted for another month or so, but I've managed to acquire it early, and after a lot of number-crunching the data, I've recompiled it into an easy-to-read format.

But that's not all! In addition to the actual 2018 MLR rebates, I've gone one step further and have taken an early crack at trying to figure out what 2019 MLR rebates might end up looking like next year (for the Individual Market only). In order to do this, I had to make several very large assumptions:

  • First, I assumed total enrollment for each carrier remains exactly the same year over year.
  • Second, I assume the average 2019 rate changes I recorded for each carrier last fall are accurate.
  • Third, I assume 2019 is seeing a 5% medical trendline on average...that is, that total 2019 claims per enrollee will be 5% higher than 2018's.

All three of these are very questionable, of course, but they at least provide a baseline.

All that being said, here's what the payments for 2018 going out this month look like in California:

Considering California is the largest state in the country, it might seem surprising that their Individual Market MLR rebates are so nominal (a mere $83,000...and even that's up from $0 last year). However, it's important to keep in mind that what matters more is the 3-year rolling average MLR percentage, not the number of people actually enrolled. It doesn't matter if an insurance carrier has a million enrollees if they still come out over the 80% threshold (and CA Physician Service proves this...they have Indy Market 761,000 enrollees).

The Small Group market, on the other hand, is a different story--nearly a million small business enrollees will receive a total of $78 million in MLR rebates, while another 43,000 enrolled in Large Group plans will split $11.5 million.

As for next year, I'd keep an eye on Health Net and L.A. County, where they're likely to see at least a few million in 2019 MLR rebates (potentially up to $14 million statewide): 

AGAIN: There's absolutely no guarantee that things will play out this way. It's possible that none of these carriers will make MLR payments next year, or only some of them will, or the amounts will be smaller. These 2019 projections are pure speculation on my part based on a number of big assumptions.