Medical loss ratios: And the formula is …

There’s lots being written about medical loss ratios since the issuance of rules about it by HHS yesterday. I’m largely not reading about it because I’m waiting for someone to just write down the formula.

Like it or not, this is math. The loss ratio is a fraction. The numerator includes the costs that are considered “medical expenses” (or some similar language). The denominator includes premiums less some things like taxes. I think in math. I can handle the math. I want the math.

I know there are different formulas for different situations, I’ll settle for a good approximation or the one or two that cover the majority of cases.

Kevin Outterson, a law professor at BU occasional poster here, told me that lawyers don’t do equations. I’d love to prove him wrong. Or maybe some non-lawyer will write or has written the equation. If you see it out there, tell me. One equation is worth 1,000 words to me and would save me hours of time reading and trying to remember how the loss ratios work.

(Yes, I could read up on it and produce the equations. I’m busy. I’d like to outsource this one. Who has done it? Who will do it?)

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