In or Out: Calculation of the Medical Loss Ratio and Its Effect on the Affordable Care Act

Abstract

On March 18, 2019, the United States Court of Appeals for the Ninth Circuit held, in Morris v. California Physicians’ Service, that when calculating the Medical Loss Ratio (MLR) provision of the Patient Protection and Affordable Care Act (ACA), there is no distinction between services from in-network or out-of-network providers. Specifically, the Ninth Circuit held that the numerator of the MLR may include out-of-network services as part the insurance company’s incurred claims. The Ninth Circuit was the first to interpret the MLR provision and address whether there was any basis in the language or spirit of the ACA to narrowly read the MLR provision. This Comment argues that the Ninth Circuit’s broad interpretation properly promotes the core values behind the enactment of the ACA.