The authors of the report estimate premium rates nationwide were $1.9 billion lower in 2012 than they would have been without the cap placed by the MLR provision, which took effect in 2011 as part of the Patient Protection and Affordable Care Act. The report also notes health insurers expect to pay out $241 million this year to customers based on spending and revenue projections for 2012.
However, the report highlighted other benefits to consumers of the provision beyond the 80-20 requirement for rebates.
“Rebates represent only a portion, albeit the most concrete portion, of the MLR rule’s savings to consumers,” the authors wrote. Consumers and businesses, they continued, are charged lower premiums to begin with as insurers aim to price their plans to achieve the 80 percent sweet spot. As health insurers get closer to their target, consumers will see MLR-related savings in the form of smaller premium bills rather than reimbursement checks.
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