The Patient Protection and Affordable Care Act’s medical loss ratio rule saved consumers in the individual market an estimated $2.1 billion last year — the bulk of it on lower premiums costs, new analysis finds.
The MLR provision, which took effect in 2011, requires insurance companies to spend no less than 80 percent to 85 percent of collected premiums on actual medical care.
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The analysis out Thursday from the Kaiser Family Foundation found that premiums for individual health insurance would have been $1.9 billion higher in 2012 if the MLR provision had not been in effect.
The premium savings are in addition to $241 million in rebates insurers estimate they will pay to customers in the individual market this year based on last year’s performance.
The MLR provision led to $1.1 billion in consumer rebates last year, but researchers said the rebates weren’t the only beneficial part of the requirement.