THE OUTLOOK FOR HEALTH CARE IN 2023:

What you need to know about the forces reshaping our industry.

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Cheat Sheet

How health plans make money

15 Minute Read

    Key Takeaways
    • Health plans make money through premiums, quality bonuses, and investments. The specific mechanisms vary by line of business and sometimes by state.
    • Premiums are the primary source of health plan revenues. Premium funds are collected into one large pool—this pool of money is used to cover medical expenses for all enrollees.
    • Medical loss ratio (MLR) is the portion of premium dollars spent on medical claims and quality improvements versus the cost of administrative expenditures.

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