Guaranteeing Value for Your Premium Dollars

When we pay for health insurance, we want to know that most of what we are paying for is for health care, not advertising, executive bonuses or overhead. It�s pretty simple: we want to get a good value for our premium dollars.

Thanks to a new rule (the �80/20 rule�) in the Affordable Care Act, you can be sure that insurance companies are spending generally at least 80 cents of every dollar you pay in premiums on your health care or activities that improve health care quality. If the insurance company fails to meet this standard, or the �medical loss ratio�, in any year, they have to pay you a rebate.

Insurance companies that didn�t meet the standard for coverage provided in 2011 are required to provide these rebates no later than August 1st of this year, and to make sure you know what you are owed, insurance companies that owe rebates will also send a letter telling you how much you�ll receive. You can see what that letter will look like here. �According to early estimates from the Kaiser Family Foundation, insurance companies will provide 15.8 million Americans with $1.3 billion in rebates.

Today, we�re also finalizing a notice for insurance companies to send you if they meet or exceed the standard. If your insurance company is providing fair value for your premium dollars, you should know that too. You�ll be able to see your plan�s medical loss ratio on HealthCare.gov starting this summer.�

The 80/20 rule and the rate review program are two ways the Affordable Care Act is protecting you. You can find out more about how the Affordable Care Act increases transparency and protects consumers here: http://www.healthcare.gov/news/factsheets/2012/02/increasing-transparency02162012a.html.