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Thursday, May 3, 2012

The Affordable Care Act gives you health care or your money back!

Cate Hulme

Staff Writer

The Kaiser Family Foundation estimates that, thanks to the Affordable Care Act, health insurance companies will send $1.3 billion dollars in rebates to consumers and small and large businesses this August. This is all because of the medical loss ratio provision that requires health insurance plans to spend most of your premium dollars on health care and quality improvements or to give your money back.

So that's $426 million that will go directly to consumers in the individual market and $918 million that will go to small and large businesses to repay their workers. However, these payments may not happen if the Supreme Court opinion or legislative action repeals the law.

The medical loss ratio in the Affordable Care Act requires that insurance companies spend at least 80 cents (or 85 cents if in the large-group market) of every dollar on paying health care claims or making quality improvements. If they don't spend enough money on health care, they have to give you money back in the form of a rebate. In essence, the Affordable Care Act ensures that everyone is in a health insurance plan that uses their money correctly.

And don't worry about the insurance companies-they will still have plenty of money to take care of marketing and administrative tasks. A study by the Government Accountability Office on whether plans will be able to meet this requirement shows that the ratio is reasonable.

The law also gives the Department of Health and Human Services the ability to review large hikes in insurance premiums to make sure that the higher premium means better care. These protections guarantee that insurance companies cannot waste your premium dollars and must give you real access to health care. They are just one of the many consumer protections at stake if the Supreme Court or Congress takes the Affordable Care Act away.