In 2010, Congress passed the Affordable Care Act, which included many critical provisions for our families, students and seniors such as giving students the opportunity to stay on their parents insurance until age 26, ensuring men and women are not prevented from acquiring health insurance due to a pre-existing condition, and requiring more transparency and responsible spending from insurance companies.
One of the key aspects of the law that I fought to include is called the Medical Loss Ratio (MLR) or the "80/20" rule, which requires insurance companies to spend generally at least 80 cents of every dollar you pay in premiums on your health care versus CEO pay and other administrative costs. If the insurance company fails to meet this standard, in any year, they have to pay you a rebate.
Late last week, the Administration announced the final rule directing insurance companies that did not meet the MLR to inform consumers and provide you with a rebate no later than Aug. 1 of this year. According to early estimates from the Kaiser Family Foundation, insurance companies will reportedly provide 15.8 million Americans with as much as $1.3 billion in rebates in 2012!
This kind of transparency and accountability is critical to our efforts to protect consumers and keep health care costs down. There is no reason for your health care premiums to be spent on sky-high executive salaries or marketing materials. This rule empowers consumers with the knowledge of which companies are playing by the rules, and holds financially accountable those which aren't. You'll be able to see your plan's medical loss ratio on HealthCare.gov starting this summer.
More than one billion dollars in rebates and the transparency to know how insurance companies are spending your hard-earned money -- it's a step in the right direction.