ACA Insurer Requirement Generated $5 Billion in Consumer Benefits Over Three Years
<p>The Affordable Care Act’s “medical loss ratio” requirement, which limits how much health plans can spend on administration and profits versus patient care, saved $5 billion for consumers from 2011 through 2013, either through rebates or reduced plan spending on overhead, a new Commonwealth Fund analysis finds.</p><p>The medical loss ratio provision, which went into effect in 2011, requires insurers to spend at least 80 percent to 85 percent of premiums on medical care and quality improvement. Researchers Michael McCue of Virginia Commonwealth University and Mark Hall of the Wake Forest University School of Law found that in 2013 insurers paid out $325 million in consumer rebates, less than one-third the amount paid out in 2011. This is an indication, they say, that insurers are stepping up their compliance with the rule.</p>
<p>Insurers’ spending on quality improvement, however, remained low, at less than 1 percent of premiums.</p>