Another aspect of "ObamaCare" is coming on board...
Health Care Finance News
Kelsey Brimmer, Associate Editor
February 20, 2012 |
HHS ensures consumers get better value for their health insurance dollar
WASHINGTON – Health and Human Services Secretary Kathleen Sebelius announced Thursday
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 healthcare.
The Affordable Care Act requires that insurance companies begin notifying customers this year
about 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. <snip>
"Before the Affordable Care Act, insurance companies could spend your premium dollars
on administrative red tape and marketing," said Sebelius in a press release.
"With today's notice, we're taking a big step toward making insurers accountable to consumers.
Some of these insurance companies have already changed their behavior
by lowering premiums or spending more on medical care and quality improvement,
while the remainder will need to refund this money to their customers this year."<snip>
Consumers will receive these notifications after Aug. 1, 2012.
The regulation requires that insurance companies send these rebates by this date,
though consumers may receive them at different times.<snip>
HHS has concluded its review of 18 state requests for adjustments to the medical loss ratio rule.
As a result of HHS’ decision to deny insurance companies the ability to spend
more premium dollars on administrative overhead costs rather than on medical claims,
consumers will receive up to $323 million in rebates this year compared to
what would have been owed if all state adjustment requests were fully granted,
according to data from state regulators and issuer reports.