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38 J. Ins. Regul. 1 (2019)

handle is hein.journals/jloins38 and id is 1 raw text is: The Differential Effects of Medical Loss Ratio Regulation on the Individual Health Insurance Market Cassandra R. Cole, Ph.D.* J. Bradley Karl, Ph.D.** Abstract The federal Affordable Care Act (ACA) imposed many new regulations on the health insurance marketplace, including a minimum medical loss ratio (MLR) requirement. However, several states had minimum MLR regulations in place prior to the enactment of the ACA. In this paper, we examine whether insurers operating in states with pre-ACA MLR regulations were better able to adapt to the new MLR requirements imposed by the ACA. We find evidence that state MLR requirements have adversely affected insurer market share. We also find that insurers operating in states without existing MLR requirements experienced decreases in market share relative to insurers operating in states with MLR requirements. Finally, there is evidence of a differential effect of the state and federal MLR requirements based on the extent of market share, with smaller insurers being more adversely affected. * William T. Hold Professor in Risk Management and Insurance, College of Business, Florida State University, 821 Academic Way, PO Box 3061110, Tallahassee, FL 32306-1110; 850-644-9283; ccole@business.fsu.edu. ** Associate Professor, IIANC-NCSLA W. Kurt Fickling Distinguished Scholar in Risk Management & Insurance, Department of Finance, East Carolina University, Bate Building 3420(A), Greenville, NC 27858; 252-328-5824; karlj@ecu.edu. © 2019 National Association of Insurance Commissioners