Report: ACA’s MLR, Rate-Review Provisions Saved Consumers $3B
The Affordable Care Act's medical-loss ratio and rate review provisions have saved consumers nearly $3 billion over two years, according to an HHS report released Friday, The Hill reports (Viebeck, The Hill, 9/19).
Under the MLR provision, insurers must issue refunds to customers if they spend less than 80% of the premiums they collect for plans sold on the individual and small group markets and less than 85% of plan premiums in the large group market on medical care. The remaining 15% to 20% can be used as profits or for CEO bonuses and administrative costs (California Healthline, 7/24).
Under the rate-review provision, insurers are required to submit to federal authorities proposed premium rate increases of 10% or more and justify those hikes. The law permits federal officials to question certain premium rate hike proposals, but they cannot stop insurers from implementing them (California Healthline, 9/13/13).
Details on Consumers' Savings
HHS said that rate-review programs saved consumers about $1 billion in 2013, while also providing additional information about health insurance plans (The Hill, 9/19). Specifically, HHS said the programs in 2013 saved individuals and families $290 million and small employers $703 million (HHS release, 9/19).
HHS added that when combined with consumer savings from the MLR provision, consumers saved more than $2.8 billion in 2012 and 2013 from the two provisions.
HHS Secretary Sylvia Mathews Burwell also announced that 21 states will receive about $25 million in federal grants to help bolster their rate review programs (The Hill, 9/19).This is part of the California Healthline Daily Edition, a summary of health policy coverage from major news organizations. Sign up for an email subscription.