Under the Affordable Care Act, what percentage of premium revenue must a health plan pay out for medical claims to receive performance bonuses?

Under the Affordable Care Act (ACA), health plans are required to meet specific medical loss ratio (MLR) standards. For plans in the individual and small group market, the ACA mandates that at least 80% of premium revenue must be spent on medical claims and health care services. This means that a health plan must allocate this percentage of its premium revenue towards direct patient care to qualify for performance bonuses and other incentives.

The rationale behind this requirement is to ensure that a significant portion of the premium dollars collected by health plans goes towards providing actual medical care rather than administrative costs or profit. This regulation is intended to promote transparency and effectiveness in health care spending, ultimately leading to better health outcomes for insured individuals.

Thus, the answer indicating that a health plan must pay out 80-85% of premium revenue for medical claims to receive performance bonuses aligns perfectly with the ACA's provisions for MLR, making it the correct choice.