According to the report, some insurers may reduce their expenses on activities that
HHS does not consider quality improvement activities in the PPACA MLR formula, such as retrospective utilization review (a review of a patient's records after the medical treatment has occurred) and preauthorization for inpatient admissions. But others are adding new quality programs and beefing up the ones that meet HHS guidelines to increase their MLRs.
And get this—some insurers said they reduced premiums in 2012. That move is partly in response to the PPACA MLR requirements but also includes other MLR-lowering strategies, such as smaller physician networks and lower commissions for insurance brokers and agents.
Of course that's not good news for brokers and agents. The National Association of Health Underwriters lobbied hard to get HHS to exclude broker and agent fees from MLR administrative cost calculations, but HHS declined to make the change in the final rules.
While it's true that some insurers are exiting markets and discontinuing some products, the overall message of the GAO reports is that whether they like the new rules or not, most health insurers are making the necessary adjustments to meet the new MLR requirements.