Snap Fact #225
ObamaCare Provides New Help for Health-Care Costs!
More Premiums Allocated for medical care, not bureaucracy

Almost half of consumers who buy their own insurance are in plans that spend more than 25% of every premium dollar on administrative costs. This ends under ObamaCare. This is arguably the most important feature of ObamaCare – it affects most policyholders.

How it works:
• Starting in 2011, many insurance companies must publicly report how much they spend on health-care costs and on administrative costs.
• If you get your insurance through a large employer or other large group, your insurer must spend at least 85% of premiums on medical care or rebate the difference to you and all its policyholders.
• If you are covered through a small employer or buy insurance on your own, insurers must spend at least 80% of premiums on medical care or rebate the difference.
• Rebates owed on 2011 premiums must be paid by August 2012.
The fine print:
• Ask your employer whether your health insurance is self-funded. Those types of plans don’t have to meet this new threshold, but most already do.
• Some states where insurers have very high administrative costs may ask for the new standard to be phased in. Check with your state insurance department to find out if your state has been granted a waiver.
• Employers and insurers that offer policies with very limited coverage may be given at least an extra year before being subject to this rule.