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The Medical Loss Ratio of the Health care Reform law is having a negative effect on carriers entering or staying in new markets.

What has happen is a carrier will go into a new market and that block of business is profitable.  So let’s say they are operating at a 70% loss ratio. Under the new law they have to be at 80% or they have to rebate the difference to the insured’s.  

The carriers are now trying to figure out how they can operate at the 80%. So until the figure out that equation they are pulling out of certain markets.  So for now the MLR is reducing competition in the Individual and small group health markets.