FOR IMMEDIATE RELEASE
November 19, 2015
Contact: CMS Media Relations
(202) 690-6145 | CMS
Media Inquiries
Health care law
results in $2.4 billion in consumer rebates on premiums since 2011
The Centers for Medicare & Medicaid
Services (CMS) released a new report today showing that consumers have received
more than $2.4 billion premium rebates since 2011 because the Affordable Care
Act requires that health insurance companies spend at least 80 percent of premium
dollars on health care. For 2014 alone, over 5.5 million consumers received
nearly $470 million in rebates, for an average of $129 per family. Those
rebates are in addition to improvements in quality and affordability savings
consumers have received as the share of insurance companies in compliance with
the requirements has increased.
“Thanks to the Affordable Care Act, there are now
programs in place to give consumers maximum value for their premium dollar,” said Kevin Counihan, CEO of the Health Insurance
Marketplace. “We are pleased that the tools
created under the health care law are working as intended to give consumers
access to high-quality health insurance coverage and keep cost
affordable.”
The Medical Loss Ratio (MLR) rule, also known as the
80/20 rule, is one of the tools created through the Affordable Care Act to keep
costs affordable for consumers. This rule requires that issuers in the
individual and small group markets spend at least 80 percent of premium dollars
on health care and activities that improve the quality of health care, rather
than on things like overhead. In the large group market, issuers are required
to spend at least 85 percent of premium dollars in this manner. Insurance
companies that fail to meet this standard owe consumers a refund in the form of
lower premiums or a check.
Today’s results show that an increasing number of
consumers are in plans where they are receiving more value for their premium
dollars up front because their premium rates were set to reasonably reflect
insurers’ spending on medical care and quality improvement activities. The
number of consumers in plans that owe refunds decreased by more than one
million in 2014, from approximately 6.8 in 2013 to 5.5 million in 2014.
Today’s report covers rebates paid for the 2014 plan
year, which represents the first full year of implementation of a number of
Affordable Care Act reforms. In 2014, issuers saw a substantial influx of
previously uninsured consumers into health insurance markets as insurance
reforms; financial assistance, and premium stabilization programs took
effect.
Consumers who are owed a rebate for 2014
should have received a notice from their issuer by October 30, 2015.
To read today’s Medical Loss Ratio report, visit: https://www.cms.gov/CCIIO/Resources/Forms-Reports-and-Other-Resources/Downloads/2014_Medical_Loss_Ratio_Report.pdf
For more information on 2014 MLRs and refunds by state, visit: https://www.cms.gov/CCIIO/Resources/Data-Resources/Downloads/2014_MLR_Refunds_by_State.pdf
Open enrollment in the Health Insurance
Marketplaces runs until January 31, 2016. Plans for 2016 are affordable more than 7 in 10 current Marketplace enrollees will be able to
find plans for $75 a month in premiums or less.
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