No, that's not how it works. Due to the ACA minimum medical loss ratio, most health plans have no direct financial incentive to deny treatment.
No, that's not how it works. Due to the ACA minimum medical loss ratio, most health plans have no direct financial incentive to deny treatment.
They still do, because that's a minimum. If they have to spend 80% of premiums on medical care, then they make a lot more profit by spending just that mandated 80%, as opposed to 85% or 90%. Which they can achieve by denying claims. That's the direct financial incentive.
You seem to be confused about basic arithmetic. First of all, the minimum MLR for most health plans is actually 85% (and most come in significantly above that for competitive reasons). And due to the MLR, health plans actually have a perverse incentive to approve more claims because 15% of a large number is more than 15% of a small number. This is one of the many reasons why total healthcare costs have continued to grow faster than inflation.
It's nice to know they do it just for the love of the game.
Mostly they do it because their customers (employers that sponsor health plans) ask them to in order to hold down costs.