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Insurers are spending more of our dollars on actual health care
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| Parent(s) |
Issue
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| Contributor | RP |
| Last Edited | RP Apr 26, 2012 06:06pm |
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| Category | Analysis |
| Author | Sarah Kliff |
| Media | Newspaper - Washington Post |
| News Date | Thursday, April 26, 2012 02:20:00 PM UTC0:0 |
| Description | One of the first health reform provisions to go into effect was a rule that insurers spend at least 80 percent of every premium dollar on medical costs, known in insurance jargon as the “medical loss ratio.” If health plans didn’t meet that target, they had to pay the difference back as a rebate. Andrew Harrer Bloomberg
Today, we have a first look at how this provision has affected the industry. Health insurance companies will pay $1.3 billion in rebates for 2011, according to a new analysis from the Kaiser Family Foundation.
Some of the rebates are significant, especially in the individual market. There, about 31 percent of subscribers are expected to get some cash back, averaging out to about $127 per person.
What’s most interesting about the $1.3 billion figure though, is that there’s a smaller gap between what the government wants insurers to spend on medical care and what they actually spend than in previous years. A Senate report last year estimated that, had this new spending requirement been in place in 2010, it would have netted consumers about $2 billion in rebates. |
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