Dive Brief:
- According to data released by HHS, Massachusetts consumers will get more than $15 million in health plan refunds this year courtesy of the ACA.
- This is part of a nationwide distribution in which 6.8 million consumers saved $4.1 billion on premiums last year and will receive $332 million in refunds, or about $80 per family.
- The refunds come as a result of the Medical Loss Ratio rule of the ACA, which requires health plans offering small group and individual market plans to spend at least 80% of premiums on medical care or quality improvement. (Large group plans must spend 85% on care or quality improvement.)
Dive Insight:
The Medical Loss Ratio provisions of the ACA seem to be working as intended, with consumers getting more value for their premium dollar. HHS data concludes, for example, that there has been a dramatic shift in upfront value for buyers of individual plans since the 2011 provision was enacted, from 62% to 81% in 2013. All told consumers have saved $9 billion since the Medical Loss Ratio rule was put into effect, HHS reports.
Over the past few years, there's been some controversy over how health plans have reported their medical loss ratios, with some observers arguing that they were padding their MLR numbers by adding in care support costs and other related but non-care items. These numbers, however, would suggest that the health insurance industry is adapting to the rules.