More Consumer Savings Thanks to Obamacare
Did you get a rebate check in the mail last month from your insurance company? Were you pleasantly surprised to see a smaller increase—or no increase at all—in your insurance premium this year? If you did, you’ve got Obamacare to thank!
The Department of Health and Human Services released a report today that found that the rate review rules and the medical loss ratio requirement in the law have helped to slow the growth of insurance premiums and saved you and me real dollars—$2.1 billion to be exact.
Thanks to the rate review rules, insurance companies can’t just raise their prices to be more profitable. Insurance companies in every state are now required to submit their proposed premium rate increases for review, and justify their proposal if they want to raise premiums by more than 10 percent. This rate review process promotes transparency and accountability in the health insurance market, and ultimately, lowers how much you and I spend on premiums. According to the HHS report, of the rate review determinations made so far, 50 percent have resulted in consumers receiving either a lower rate of increase than requested or no increase at all. That adds up to approximately $1 billion saved on health care premiums in the individual and small group markets across the country!
The new medical loss ratio requirements were found to save consumers a total of approximately $1.1 billion this year. Medical loss ratios measure the amount of our premium that insurance companies actually spend on covering the cost of delivering care versus the amount they spend on administrative costs, marketing, and profits. The medical loss ratios of our insurance companies can help us gauge whether we’re getting a good deal for how much we’re paying. Obamacare requires insurance companies to spend at least 80% of premiums on health care and requires companies to provide rebates to their customers if they fall short.
Both the rate review regulations and the medical loss ratio requirements promote greater transparency and accountability in the health insurance market. They help us as consumers make sure we know the deal that we’re getting and set a minimum requirement for the value of that deal. And according to HHS, they’re already saving us money.
Did you and your family benefit from these new requirements? What will you do with that extra cash?