Senate bill could roll back consumers' health insurance savings

March 19, 2012 by MassDevice

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by Lena Groeger , ProPublica

This summer, health insurance companies may have to pay more than a billion dollars back to their own customers. The rebate requirements were introduced as part of the 2010 health-care reform law and are meant to benefit consumers. But now an insurer-supported Senate bill aims to roll back the rebate requirements.

Known as the medical loss ratio rule, it's actually pretty simple. Under the health-care law provision, 80 to 85 cents of every dollar insurers collect in premiums must be spent on medical care or activities that improve the quality of that care. If not, they must send their customers a rebate for the difference. The goal, according to the Department of Health and Human Services, is to limit the money insurers spend on administrative costs and profit.

"It essentially ensures that consumers receive value for every dollar they spend on health care," HHS spokesman Brian Chiglinsky told ProPublica.

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