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.
“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.
Complete your profile to continue reading and get FREE access to BenefitsPRO, part of your ALM digital membership.
Your access to unlimited BenefitsPRO content isn’t changing.
Once you are an ALM digital member, you’ll receive:
- Breaking benefits news and analysis, on-site and via our newsletters and custom alerts
- Educational webcasts, white papers, and ebooks from industry thought leaders
- Critical converage of the property casualty insurance and financial advisory markets on our other ALM sites, PropertyCasualty360 and ThinkAdvisor
Already have an account? Sign In Now
© 2024 ALM Global, LLC, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.
