WASHINGTON, Nov. 22 (UPI) -- The federal government Monday said U.S. insurance companies in 2011 will need to spend 80 percent to 85 percent of premiums on patient care.
The Department of Health and Human Services said the so-called "medical loss ratio" provision of the Affordable Care Act "will make it easier for consumers to purchase plans that provide better value for their money."
The department said companies that do not spend 80 percent to 85 percent of premiums "on medical care and health quality care improvement" would be forced to send rebates to customers starting in 2012.
"These new rules are an important step to hold insurance companies accountable and increase value for consumers," said HHS Secretary Kathleen Sebelius in a statement.
The HHS estimated consumers could be eligible for rebates worth $1.4 billion in 2012.
The rule applies to 74.8 million citizens with health insurance, the department said.
In a statement, AARP Executive Vice President Nancy LeaMond said the new rules "strike a smart balance between ensuring value for consumers and compensating insurers for legitimate administrative costs."
"Coupled with new benefits under the health care law, these regulations ensure consumers will receive better value for their health care dollars," she said.
Read More
- Income has role in healthcare satisfaction
- Poll: 62 percent rate healthcare excellent
- Americans unhappy about healthcare law
- Healthcare access larger concern for Dems
- More than 59 million in U.S. uninsured
- Ideology trumps party on healthcare reform
- More taking high-deductible health plans
- Health insurance co-payments may disappear
- Gibbs: Healthcare repeal not likely
- No health insurance for 1-in-6 U.S. adults
- High deductibles can delay healthcare