The Department of Health and Human Services released a report last week that showed that, as a result of more efficient insurance operations, consumers saved $3.4 billion on their premiums.
The report includes the 2012 health insurer data required under the 80/20 rule of the Affordable Care Act and revealed that, compared to 2011, more insurers are spending more premium dollars on measures aimed at improving patient care and quality, rather than creating red tape and paying out executive bonuses.
The 80/20 rule requires insurers to spend at least 80 cents of every premium dollar on patient care and quality improvement. If more money is spent on other expenses, such as red tape and profits, consumers are owed a rebate, which are required to be paid through a rebate check in the mail, lump-sum reimbursement into the account used to pay the premium or reduction to a future premium.
“The healthcare law is providing consumers value for their premium dollars and ensuring the money they pay every month to insurance companies goes toward patient care,” HHS Secretary Kathleen Sebelius said. “Thanks to the law, 8.5 million Americans will receive $500 million back in their pockets and purses.”
The report showed that the law encouraged insurers to lower prices or improve coverage to meet the standard, which has contributed to consumers savings of $5 billion since the program’s inception.