Consumers saved $3.9 billion
on premiums in 2012
Health care law will provide
families an average of
$100 back in premium rebates
Today,
the Department of Health and Human Services (HHS) announces that
nationwide, 77.8 million consumers saved $3.4 billion up front on their
premiums
as insurance companies operated more efficiently. Additionally,
consumers nationwide will save $500 million in rebates, with 8.5 million
enrollees due to receive an average rebate of around $100 per family.
Today’s
report includes the 2012 health insurer data required under the
Affordable Care Act’s Medical Loss Ratio(MLR), or “80/20 rule.” The
report
shows that, compared to 2011, more insurers are meeting this standard
and spending more of their premium dollars directly toward patient care
and quality, and not red tape and bonuses.
Created
through the Affordable Care Act, the rule requires insurers to spend at
least 80 cents of every premium dollar on patient care and quality
improvement.
If they spend a higher amount on other expenses like profits and red
tape, they owe rebates back to consumers. For many consumers, the
report found that the law motivated their plans to lower prices or
improve their coverage to meet the standard. This new
standard and other Affordable Care Act policies contributed to
consumers saving approximately $3.9 billion on premiums in 2012, for a
total of $5 billion in savings since the program’s inception.
“The
health care law is providing consumers value for their premium dollars
and ensuring the money they pay every month to insurance companies goes
toward patient care,” HHS Secretary Kathleen Sebelius said. “Thanks
to the law, 8.5 million Americans will receive $500 million back in
their pockets and purses.”
If
an insurer did not spend enough premium dollars on patient care and
quality improvement, rebates will be paid in one of the following ways:
·
a rebate check in the mail;
·
a lump-sum reimbursement to the same account that they used to pay the premium if by credit card or debit card;
·
a reduction in their future premiums; or
·
their
employer providing one of the above, or applying the rebate in another
manner that benefits its employees, such as more generous benefits.
Insurance
companies that do not meet the standard will send consumers a notice
informing them of this new rule. The notice will
also let consumers know how much the insurer did or did not spend on
patient care or quality improvement, and how much of that difference
will be returned as a rebate.
The
80/20 rule, along with the required review of proposed double-digit
premium increases, works to stabilize and moderate premium rates. And,
with
the new market reforms,
including the guaranteed availability protections and prohibition of
the use of factors such as health status, medical history, gender and
industry of employment to set premiums rates, this policy helps ensure
every American has access to quality, affordable
health insurance.
To access the report released today, visit:
http://www.cms.gov/cciio/
For more information on MLR, visit:
http://www.healthcare.gov/
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