By Kathryn Mayer
The Patient Protection and Affordable Care Act
saved consumers nearly $4 billion on their insurance premiums in 2012, the Obama administration said Thursday.
The Department of Health and Human Services said that nearly 80 million consumers saved $3.4 billion up front on their premiums as “insurance companies operated more efficiently.” Consumers also received $500 million in rebates from insurers that did not meet the new standards under the law.
That savings is due mainly to the medical loss ratio
rule, a rule that requires insurance companies to spend 80 percent or 85 percent of their premiums on medical costs, leaving only the remaining 15 percent or 20 percent for profit and administrative expenses. The rule went into effect in 2011.
The rule has saved consumers roughly $5 billion over the past two years, HHS said.
“The health care law is providing consumers value for their premium dollars and ensuring the money they pay every month to insurance companies goes toward patient care,” HHS Secretary Kathleen Sebelius said in a statement.
HHS touted the savings just as the Obama administration
continues to take heat for the law. In a report Wednesday, the Government Accountability Office pointed to challenges in opening the federal exchanges on time. The law continues to generate negative perceptions in a majority of Americans, while many more are confused about the benefits or overall implications the law has on them.
Originally published on BenefitsPro.com