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Democrats and Republicans and supporters of President Obama's health care law and sharp opponents don't see eye to eye on much but they probably agree on this -- it's a good thing when consumers save money. And that's exactly what the Obama administration says has happened, estimating that consumers saved $1 billion on their health care premiums in just one year due to the "rate review" provision under the law.
The provision puts the onus on insurance companies. If your insurance company wants to raise your premium by more than 10%, it has to prove why. Are there legitimate reasons for such an increase or are the increases based on assumptions which can't be justified such as projecting excessive increases in medical costs?
According to a report to be released by the Department of Health and Human Services (HHS) Tuesday, since September 2011, nearly two-thirds of the proposed rate increases by insurance companies above 10% have been found to be unreasonable or have been modified or withdrawn, which saved consumers approximately $1 billion in premium payments.
"Rate review is a critical piece of the Affordable Care Act, " said Teresa Miller, acting director of oversight, Center for Consumer Information and Insurance Oversight, which is part of HHS. "It brings unprecedented scrutiny to health inusrance rate increases, ensures consumers receive fair value for their premium dollars and holds insurance companies accountable."
Another provision of the law, according to HHS, saved you, me and other consumers another $1.1 billion. The 80/20 rule requires insurance companies prove that 80% of premiums are being spent on health care, not on salaries and other administrative costs. Any insurer that doesn't spend at least 80% of premium dollars on health care must send a refund to consumers for the difference. 13 million Americans got such rebates, according to the White House, resulting in $1.1 billion in savings.
These numbers won't bring an end to the debate over health care in the presidential campaign nor should they. A good and robust discussion of what President Obama and Mitt Romney plan to do when it comes to providing health care to Americans should be a big part of the campaign especially after another report, out last week, charged that 30% of health care spending in the U.S. goes to unnecessary services, administrative costs and fraud. But the numbers documenting how much less consumers paid for insurance due to these review provisions are hard to brush off. How do you argue against saving consumers $2.1 billion?