Explainer: Vertical Integration May Allow Insurers to Skirt Medical Loss Ratio Requirements

The aggressive approach by health care conglomerates to vertically integrate across almost every aspect of the health care system has raised serious questions about the impact their model has on the system and could lead to patients paying more. A prime example is how business arrangements between affiliated entities are treated when calculating the medical loss ratio (MLR), or amount of money insurers spend on patient care compared to administrative costs, profits, executive compensation, marketing and other expenses.

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