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Monday, September 25, 2023

Health care law helping Colorado families see refunds

By Mike Fierberg
Special to The SUN

Health and Human Services Secretary Sylvia M. Burwell announced that 52,277 consumers in Colorado will benefit from $2,721,701 in refunds from insurance companies this summer, averaging $93 per family, because of the Affordable Care Act.

Created through the law, the 80/20 rule, also known as the Medical Loss Ratio (MLR) rule, requires insurers to spend at least 80 percent of premium dollars on patient care and quality improvement activities. If insurers spend an excessive amount on profits and red tape, they owe a refund back to consumers.

“The 80/20 rule is bringing transparency and competition to the insurance market, ensuring that consumers are continuing to receive value for their premium dollars,” said Burwell. “Standards like these created under the health care law are providing Coloradans with immediate savings and are helping to keep costs down over the long-term.”

Nationwide, consumers have saved a total of $9 billion on their health insurance premiums since the 80/20 rule took effect. Last year alone, consumers nationwide saved an estimated $3.8 billion because of reduced premiums as insurance companies operated more efficiently. Additionally, consumers nationwide will receive $330 million in refunds, with 6.8 million consumers due to receive an average national refund benefit of $80 per family.

Since the standard took effect, more insurers year after year are meeting the 80/20 rule by spending more of the premium dollars they collect on patient care and quality, and not red tape and bonuses.

If an insurer did not spend enough premium dollars on patient care and quality improvement, Coloradans will see their value reflected in one of the following ways:

  • a refund check in the mail;
  • a lump-sum reimbursement to the same account that they used to pay the premium if by credit card or debit card;
  • a reduction in their future premiums; or
  • their employer using refunds to improve their health coverage.

The 80/20 rule, along with other standards such as the required review of proposed premium increases, is one of many reforms created under the health law helping to slow premium growth and moderate premium rates. Combined with the savings consumers are receiving from tax credits on the Marketplace and the new market reforms, including prohibition of the use of pre-existing condition exclusions and charging women more for insurance than men, the 80/20 rule helps ensure every American has access to quality, affordable health insurance.

For an overview of insurers’ 80/20 data in 2013, visit www.cms.gov/cciio/Resources/Forms-Reports-and-Other-Resources/index.html#Medical Loss Ratio.

For more information on the 80/20 rule, visit www.cms.gov/CCIIO/Programs-and-Initiatives/Health-Insurance-Market-Reforms/Medical-Loss-Ratio.html.

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