The Affordable Care Act has saved consumers $2.1 billion on health insurance premiums, according to a report by the Dept. of Health and Human Services. Beginning Sept. 1, 2011, the health care law implemented federal rate review standards. These rules require insurance companies to submit proposed rate increases for public review and justify their actions if they want to raise rates by 10% or more. HHS says that new rate review rules prevent insurance companies from raising rates without accountability or transparency. To date, rate review has helped save $1 billion for Americans. Additionally, the law’s Medical Loss Ratio rule is helping deliver rebates worth $1.1 billion to nearly 13 million consumers. HHS secretary Kathleen Sebelius said, “Thanks to the law, our health care system is more transparent and more competitive and that’s saving Americans real money.”
The Affordable Care Act provides states grants to enhance their rate review programs. Forty-two states have used the funds to beef up their rate review process. The HHS says that consumers have saved approximately $1 billion in premiums in the individual and small group markets because of rate review.
The HHS says that this initiative is one of many in the health care law aimed at saving money for consumers. It works with the 80/20 rule, which requires insurance companies to generally spend 80% of premiums on health care or provide rebates to their customers. Insurance companies that have not met the 80/20 rule will provide more than $1.1 billion in rebates this year to nearly 13 million Americans. Americans receiving the rebate will benefit from an average rebate of $151 per household.
