New Medical Loss Ratios Mean Transparency, Consumer Protection, and Maybe Even Rebates!
November 22 2010
For years, you have paid a monthly health care premium. You have seen that premium increase year after year and probably wondered -- where the money is going? How much is used for health care and how much is used for other things like overhead, administrative costs, windfall profits, or CEO bonuses?
In 2011, that starts to change.
Today, the Department of Health and Human Services (HHS) announced new provisions to protect consumers, and make your insurance premiums more transparent and accountable.
Several weeks ago, we explained a little about “medical loss ratios.” Basically, they’re a provision of the Affordable Care Act that requires health insurers to spend 80 to 85 percent of premiums directly on care for patients and quality improvements.
With the new rules, insurers who collect too much on premium payments will provide rebates to their customers starting in 2012. The HHS estimates that these rebates will affect millions of Americans charged unfair premiums by insurers:
"The new rules will protect up to 74.8 million insured Americans and estimates indicate that up to 9 million Americans could be eligible for rebates starting in 2012 worth up to $1.4 billion. Average rebates per person could total $164 in the individual market."
Beyond the cash savings, the new rules broadly ensure that the insurance marketplace is more transparent, by requiring that insurance companies publically disclose how they spend premium dollars.
According to Jay Angoff, Director of the Office of Consumer Information and Insurance Oversight at HHS:
"These rules were carefully developed through a transparent and fair process with significant input from the public, the States, and other key stakeholders... As we build a bridge to 2014, when better, more affordable options are available to consumers, these rules will help make health insurance fairer for consumers now."
For more information about medical loss ratios and rebates, see the fact sheet at Heathcare.gov.
"Under new plans, no child under age 19 will be denied coverage for a pre-existing conditions, period. Adults who have been without insurance for six months and who have been unable to obtain insurance because of a pre-existing condition, can apply for coverage under the Pre-Existing Condition Insurance Plan (PCIP)."
Insurers can no longer cut someone after the fact.
New screening procedures are now in place for health care providers to eliminate fraud and waste in the health care system.
Medicare Part D enrollees who hit the Medicare prescription drug benefit gap in 2010 will automatically receive a $250 rebate check.
Effective immediately, qualified small employers get tax credits of up to 35% of premiums for offering coverage.
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America's new health care law makes it easier for you to find the quality, affordable health care that you and your family need.
