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The typical buyer receives a string of payments worth (at discounted present value) 95 cents for every premium dollar he pays in.
The policies were so badly priced that some insurers ended up with as much as $11 in expected future claims and costs for every dollar they got in premium revenue (a normal ratio is more like $1.25 for every premium dollar).
The policies were so badly priced that some insurers ended up with as much as $11 in expected future claims and costs for every dollar they got in premium revenue; the ideal ratio is more like $1.25 for every premium dollar.
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In 1993, before the conversion of many nonprofit insurance firms to for-profit status, the average MLR was 95percentt, meaning that insurers were paying out 95 cents of every premium dollar for our actual health care.
An investigation by Senator Jay Rockefeller found that just 74 cents of every premium dollar for individual health insurance actually went to pay for health care.
Medical costs consumed 78 cents of every premium dollar for Aetna's employer-sponsored health plans, down from 81.6 cents in the fourth quarter of 2002, the company said.
In California, for example, last year, when there was an effort to try to reform the system at the state level in California, one of the things that was advocated, even by the governor and a lot of state legislators, was setting - or requiring that insurers pay at least 85percentt of every premium dollar for medical care - or to pay claims.
Incredibly, they took on portions of the premium at a ratio of 400% — $4 of loss and expenses for every $1 of premium.
That means State Farm paid out $1.25 in claims for every $1 of premium collected.
Last year, auto liability insurers were paying 79 cents for every $1 in premiums.
In 2001, according to A. M. Best, the insurance-rating agency, malpractice insurers reported 19 cents in investment income for every $1 in premiums.
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Justyna Jupowicz-Kozak
CEO of Professional Science Editing for Scientists @ prosciediting.com