Snap Fact #149
ObamaCare Ensures That You Are getting the most care from your premium dollars!
Today's benefit is one of the most important yet least known aspects of the Affordable Health Care Act. If you have any doubts about the overall merit of this 2000 + page document you need look no further than reading below to understand how the Affordable Care Act benefits you and your fellow countrymen.
The Affordable Care Act (ACA) includes several provisions that change the way private health insurance is regulated in an effort to provide better value to consumers and increase transparency. One such provision, the Medical Loss Ratio (or MLR) requirement, limits the portion of premium dollars health insurers may spend on administration, marketing, salaries, bonuses, and profits. Under health care reform, health insurers must publicly report the portion of premium dollars spent on health care and quality improvement and other activities in each state they operate on a new national consumer website – HealthCare.gov.
Beginning in January, 2012, the Affordable Care Act requires individual and small group insurers to spend at least 80% and large group insurers to spend at least 85% of your premium dollars on direct medical care and efforts to improve the quality of care you receive – and rebate you the difference if they fall short. This will limit spending on overhead and salaries and bonuses paid to insurance company executives and provide new transparency into how your dollars are spent.
Insurance companies must calculate and report their MLR, and how rebates will be distributed, effective January 3, 2012. Among other things, the rule: provides that MLR rebates will be issued in a way that is tax-free to consumers and expands the MLR information that insurers must provide to consumers. This means that the actual care that patients will receive and the fairness of settlements will tilt the playing field back in our favor. The days of outlandish behavior by the insurance companies is over and a reasonable government regulation will protect all consumers of their products from anything-we-say-goes attitude of the companies. If they fall short they must write checks to all of their clients to make up the difference.