HHS ensures consumers get better value for their health insurance dollar

Administration actions saved consumers up to $323 million

Health and Human Services Secretary Kathleen Sebelius announced today that consumers will soon begin receiving unprecedented information on the value of their health insurance coverage, and some will receive rebates from insurance companies that spend less than 80 percent of their premium dollars on health care.

The Affordable Care Act requires that insurance companies this year begin notifying customers how much of their premiums they have spent on medical care and quality improvement. Beginning in 2011, insurers were required to spend at least 80 percent of total premium dollars they collect on medical care and quality improvement. Insurance companies that do not meet the 80/20 standard (also known as the Medical Loss Ratio) are required to pay rebates to their customers this year.

These adjustment request determinations were made as a result of a transparent and data-driven process, and the documentation related to each state’s request has been publicly posted. In total, HHS determined that no adjustment was necessary in ten states, approved an altered adjustment in six states, and approved the request sought by one state. This includes a denied adjustment for Wisconsin, and an altered adjustment for North Carolina, both announced today.

Today's announcement is part of the Obama Administration’s effort to increase transparency in the health insurance marketplace. The notification will let consumers know if their insurer did not meet the 80/20 standard -- and that they or their employer will receive a rebate. HHS is also considering requiring insurers notify consumers if their insurer did meet the 80/20 standard. For the text of these proposed notifications, please visit: http://cciio.cms.gov/resources/other/index.html#mlr

For more information on the MLR provision in the Affordable Care Act, please visit: http://www.healthcare.gov/news/factsheets/2010/11/medical-loss-ratio.html

For documentation of state requests for MLR adjustments, including specific information on rebates saved by HHS’ MLR adjustment determinations, visit:
http://cciio.cms.gov/programs/marketreforms/mlr/index.html

For more information on how the Affordable Care Act is creating a transparent market for health insurance, visit:
http://www.healthcare.gov/news/factsheets/2010/12/increasing-transparency.html

Click here to read the entire HHS Press release issued today http://www.hhs.gov/news/press/2012pres/02/20120216b.html

Click here to view the Federal Register notice: https://s3.amazonaws.com/public-inspection.federalregister.gov/2012-03844.pdf