Health Care Law Saved About $2.1 Billion for Consumers
New rules prevent insurance companies from raising rates without accountability (Sept. 11)
The Affordable Care Act has saved consumers an estimated $2.1 billion on health insurance premiums, according to a report released on September 11 by the Department of Health and Human Services. For the first time, new rate-review rules in the health care law prevent insurance companies in all states from raising rates with no accountability or transparency.
To date, rate review has helped save an estimated $1 billion for Americans, the report says. In addition, the law’s Medical Loss Ratio (or 80/20) rule is helping deliver rebates worth $1.1 billion to nearly 13 million consumers. The 80/20 rule requires insurance companies to generally spend 80% of premiums on health care or provide rebates to their customers.
Beginning on September 1, 2011, the health care law implemented federal rate review standards. These rules ensure that, in every state, insurance companies are required to publicly submit for review and justify their actions if they want to raise rates by 10% or more.
To assist states in this effort, the Affordable Care Act provides states with health insurance rate-review grants to enhance their rate-review programs and to bring greater transparency to the process.
The new report shows that, because of rate review, consumers saved approximately $1 billion in premiums in the individual and small group markets.
For more information, visit the Department of Health and Human Services Web site.