Reform Law Has Saved Consumers $2.1B Since Last Fall, HHS Reports

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Provisions in the Affordable Care Act have saved consumers $2.1 billion since September 2011, according to an HHS report released Tuesday, The Hill's "Healthwatch" reports.

HHS Secretary Kathleen Sebelius attributed the savings to the ACA's medical-loss ratio rule and the law's requirement that insurers justify premium increases of 10% or more
(Viebeck, "Healthwatch," The Hill, 9/11).

Under the ACA's MLR rule, private insurers must spend at least 80% in the individual market, or 85% in the group market, of premium dollars on direct medical costs. Insurers that do not comply with the ratio must issue rebates to consumers (California Healthline, 8/1). The MLR rule saved about $1.1 billion among 13 million consumers, resulting in an average rebate of $151 per household, according to the report.

Under the rate review rules, insurers must notify state or federal health regulators of proposals to increase premiums by 10% or more. Under the ACA, HHS has distributed $160 million in grants to boost insurance rate review programs. Forty-four states have programs to oversee insurers' proposals for rate increases, and federal officials oversee the proposals in states that do not have such programs.

HHS' Center for Consumer Information and Insurance Oversight Director Gary Cohen said state regulators reviewed 69% of the proposals, while federal officials looked over the remaining 31%.

Among the rates that were reviewed:

  • About 36% were approved without changes;
  • About 26% were rejected;
  • 12% were withdrawn during review; and
  • 26% were changed.

Overall, the report estimates that the requirements helped reduce premium increase proposals by an average 2.8 percentage points. According to the report, that has saved $1 billion among 800,000 consumers.

However, federal officials said it is difficult to determine how much money insurance regulators would have saved if the reform law had not been in place because states did not uniformly report that information before the overhaul.

Democrats Tout, GOP Questions Report

Democrats are touting the report as proof that the health reform law is helping consumers, CQ HealthBeat reports. House Democratic Whip Steny Hoyer (D-Md.) said that the ACA "has brought real savings to individuals and to our economy as a whole."

Meanwhile, Republicans have said the report does not prove the overhaul is responsible for reducing costs in a significant way. Some Republican lawmakers noted that a Kaiser Family Foundation report released Tuesday found that premiums for large employer-sponsored health insurance increased by about 4% this year.

Sen. Michael Enzi (R-Wyo.) called the HHS report an "election year gimmick that ignores the true total cost increases of the new health care law" (Adams, CQ HealthBeat, 9/11).

terence francis
Convoluted gibberish.
Shirley Svorny
If we tell companies that sell bread they can't raise the price of bread and we tell them how much of the money they spend must be spent on ingredients imagine the outcome ;) Just because you can't easily see the consequences when it comes to healthcare it doesn't mean they are not there. Should we call the money "saved" savings or a cost to consumers of reduced access to products?

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