BETHESDA, Md., June 22 (UPI) -- Some 78 million consumers saved $3.4 billion on health insurance premiums as insurance companies complied with the Affordable Care Act, U.S. officials say.
Officials of the U.S. Department of Health and Human Services also said consumers nationwide will save $500 million in rebates, with 8.5 million enrollees due to receive an average rebate of around $100 per family.
Created via the Affordable Care Act, the Medical Loss Ratio, or "80/20 rule," requires health insurers to spend at least 80 cents of every premium dollar on patient care and quality improvement than on overhead and bonuses.
Kathleen Sebelius, secretary of health and human services, said the report showed, compared with 2011, more insurers met the standard and spent more of their premium dollars directly toward patient care and quality, and not red tape and bonuses, officials said.
"The healthcare law is providing consumers value for their premium dollars and ensuring the money they pay every month to insurance companies goes toward patient care," Sebelius said in a statement. "Thanks to the law, 8.5 million Americans will receive $500 million back."
If an insurer did not spend enough premium dollars on patient care and quality improvement, rebates will be paid in one of the following ways:
-- A rebate check in the mail.
-- A lump-sum reimbursement to the same account that they used to pay the premium if by credit card or debit card.
-- A reduction in future premiums, or an employer providing one of the above, or applying the rebate in another manner that benefited its employees, such as more generous benefits.
Insurance companies that do not meet the standard will send consumers a notice informing them of this new rule, HHS said.
The notice will also let consumers know how much the insurer did or did not spend on patient care or quality improvement, and how much of that difference will be returned as a rebate, Sebelius said.