The Patient Protection and Affordable Care Act's rules regulating carriers may have not have benefited the health insurance industry but they've yielded nearly $3 billion in savings to consumers in the last two years, the Obama administration said.
The Department of Health and Human Services said rules under the law that crack down on carriers, including the medical loss ratio provision and rate reviews, has saved policyholders a total of $2.8 billion between 2012 and 2013.
The agency said rate reviews — the process by which state regulators veto health insurance premium increases that they consider excessive — have saved individuals and families $290 million, and $703 million for small employers in 2013 alone.
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"Before the Affordable Care Act, consumers regularly faced significant annual premium increases," HHS Secretary Sylvia Burwell said in a statement. "In 2013 alone, we see that rate review programs saved consumers approximately $1 billion while providing them with the information they need to get the care they deserve."
Burwell also announced that 21 states will divvy up roughly $25 million in additional federal grants for their rate review programs.
HHS touted lower than usual premium increases because of the law. "Consistent with previous years since the rate review provision went into effect, [the] report shows that the implemented rate increases were smaller than what was originally requested across both the individual and small group markets," HHS said.
Under the MLR provision, carriers must issue refunds to customers if they spend less than 80 percent of the premiums they collect for plans sold on the individual and small group markets and less than 85 percent of plan premiums in the large group market on health care.
The MLR provision has garnered criticism from those in the industry, with industry groups arguing the impact of the MLR rules on agents and brokers has been damaging since many carriers have cut their agent compensation significantly to comply.
"The medical loss ratio requirement does nothing to address the main drivers of health care costs and puts an arbitrary cap on what health plans spend on a variety of programs and services that improve the quality and safety of patient care," AHIP spokeswoman Clare Krusing said earlier this year. "Moreover, the health care reform law's $100 billion health insurance tax will cause premium increases that exceed the value of prospective rebates."
Also read: Which carriers paid the most MLR rebates?
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