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HEHS-94-131R 1 (1994-04-04)

handle is hein.gao/gaobacknf0001 and id is 1 raw text is: 



United StatesIt%
General Accounting Office
Washington, D.C. 20548

Human Resources Division

B-247510

April 4, 1994

The Honorable Daniel Patrick Moynihan
Chairman
The Honorable Bob Packwood
Ranking Minority Member
Committee on Finance
United States Senate

The Honorable John D. Dingell
Chairman
The Honorable Carlos J. Moorhead
Ranking Minority Member
Committee on Energy and Commerce
House of Representatives

The Honorable Dan Rostenkowski
Chairman
The Honorable Bill Archer
Ranking Minority Member
Committee on Ways and Means
House of Representatives

Title IV, part 5 of the Omnibus Budget Reconciliation Act of
1990 (OBRA 1990, P.L. 101-508, Nov. 5, 1990) amended section
1882 of the Social Security Act, which prescribes standards
for individual and group Medicare supplemental (Medigap)
insurance policies. The law requires Medigap policies sold
to individuals to achieve a 65-percent loss ratio;1 for
policies sold to groups, the required loss ratio is 75
percent. OBRA 1990 also requires insurers to provide
policyholders a proportional refund or credit against future
premiums if these loss ratio percentages are not met after
the policies have been in force for 2 years or longer.







'The loss ratio is the percentage of premiums returned to
policyholders as benefits and is one measure of the economic
value of these policies. Under federal law before OBRA
1990, the minimum loss ratio requirement for Medigap
policies sold to individuals was 60 percent.


GAO/HEHS-94-131R Medigap Loss Ratios, First 2 Years

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