A new federal report issued today says a health reform measure authored by U.S. Sen. Al Franken (D-Minn.) is responsible for more than half of the $2.1 billion that families and businesses in Minnesota and across the country have saved on insurance premiums in the past year.
A review of annual insurance rates issued Tuesday by the U.S. Department of Health and Human Services (HHS) found that consumers have saved $2.1 billion since September 2011 under the nation's health care reform law. More than half the savings came from the provision Sen. Franken added to the law, which HHS announced earlier this year would result in $1.1 billion in health insurance rebates for almost 13 million Americans - including 123,000 Minnesotans.
Sen. Franken's provision, known as the "medical loss ratio," requires health insurers to spend at least 80 percent of what they collect in premiums on actual health services for their customers, as opposed to administrative costs, profits, marketing, or CEO salaries. Insurance companies that failed to meet that threshold had to issue rebates by August 1 of this year. Minnesotans received $8.9 million in rebates this year.
"I am very pleased that the Affordable Care Act is keeping insurance costs for families and businesses in check," Sen. Franken said. "My medical loss ratio provision, combined with the law's rules to stop unwarranted premium increases, have saved consumers more than $2.1 billion in the past year. That's real savings that will continue to help keep costs down for millions of people in Minnesota and across the country."
Beyond Sen. Franken's medical loss ratio provision, the HHS report found that consumers saved $1 billion because of the health care law's rate review program, which required insurers in all 50 states to justify premium hikes they impose on families and businesses.
Information on the HHS report can be found here: http://www.healthcare.gov/law/resources/reports/rate-review09112012a.html