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MLR rule saved consumers $1.5 billion

Consumers saw nearly $1.5 billion in insurer rebates and overhead cost savings in 2011 due to health reforms medical loss ratio provision, according to a Commonwealth Fund study.

By Kathryn Mayer | Updated on December 10, 2012

Consumers saw nearly $1.5 billion in insurer rebates and overhead cost savings in 2011 due to health reform’s medical loss ratio provision, according to a Commonwealth Fund study.

The MLR provision of the Patient Protection and Affordable Care Act requires that health insurers selling plans to individual consumers spend at least 80 percent of the premiums they collect on medical care. The report says that consumers with individual policies saw substantially reduced premiums when insurers reduced both administrative costs and profits to meet the new standards.

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