Date of Award
Doctor of Business Administration (DBA)
School of Business
Dr. Paul Shelton
Dr. Joshua Sauerwein
Dr. Barbara Archer
The Affordable Care Act (ACA) has proved to be a contentious regulatory and political topic. Although key features were established within the law the complexity of the new provisions and political opposition resulted in a series of federal and state governmental process changes, rule clarifications, and legal challenges. One component of the ACA is the introduction of a federal Medical Loss Ratio (MLR), which requires insurers to spend specified percentages of their premium revenue dollars on medical services and quality improvement actions. If thresholds are not met, insurers must refund premiums to their members, potentially removing millions of dollars from their operating income in any given year. This research uses event study methodology to examine share price fluctuations for publicly traded health insurers to understand the relationship between legislative and regulatory events associated with the establishment of the ACA and the federal MLR requirements. Regulatory developments in aggregate were found to be associated with slightly positive changes in share prices. Legislative events in aggregate were not associated with a significant change in share prices for publicly traded health insurers. Upon closer investigation, the initial draft of ACA legislation produced by the HELP Committee and sent to the Congressional Budget Office on June 9, 2009, including federal MLR requirements, was associated with a significant negative change in share prices for publicly traded health insurers.
Quinn, Rachelle, "Public Company Health Insurers and Medical Loss Ratios: An Event Study of Dates Associated with the Affordable Care Act" (2017). Doctor of Business Administration (DBA). 12.