Georgia Navigator Practice Exam

What is one of the two required methods to prove insurance affordability according to the Medical Loss Ratio (MLR) regulations?

1. Rate Review Method

2. Employee Review Method

3. Expenditure Review Method

4. Cost Transparency Method

The correct answer is: Rate Review Method

The Rate Review Method is one of the two required methods to demonstrate insurance affordability under the Medical Loss Ratio (MLR) regulations. This approach involves the assessment of health insurance rates to ensure they are reasonable and justifiable based on actuarial standards. The purpose of this method is to monitor and manage premiums charged to consumers, ensuring that they reflect the actual costs of providing healthcare services while providing sufficient financial assistance to the insurer. By using this method, regulators and insurers need to evaluate whether the proposed rates are in compliance with MLR standards, which aim to ensure that a significant portion of premium dollars is spent on medical care rather than administrative costs or profits. Thus, this method is crucial for maintaining consumer protection in the health insurance marketplace and ensuring that coverage remains affordable and accessible.