The U.S. Department of Health and Human Services issued a final regulation today that it estimates will save insured Americans up to $4.9 billion in cash rebates, lower premiums or increase benefits over the next three years, and Democrats are crowing.
The new regulation is part of the so-called ‘medical-loss ratio’ provisions contained in the Patient Protection and Affordable Care Act – the healthcare reform bill – that President Barack Obama signed into law in March. Those provisions demand that most insurers spend at least 80 to 85 percent of consumers’ premiums on health care, instead of on advertising, CEO bonuses, and other administrative costs not related to health care’s quality.
To Democrats, this looks like ammunition for the coming Congress, in which a Republican House majority hopes to repeal the Affordable Care Act.
“Repeal this?” House Education and Labor Committee Chairman George Miller, D-Martinez, asked in his news release. “Republicans in Washington have pledged to repeal the health care law. If they succeed, they will be taking money right out of the pocket of millions of average Americans. They might think that’s a good idea but I certainly don’t. So let’s just be very clear about what’s at stake when Republicans call for the repeal of the new health care law.
Miller said the new regulation is good news for Americans who are paying too much in health insurance premiums – some of which have been raised by double digits even while insurers report billions in profits.
“But make no mistake about it — repealing the health reform law will take money directly out of consumers’ pockets,” he said.
House Ways and Means Health Subcommittee Chairman Pete Stark, D-Fremont, issued a news release that said more than 20 percent of consumers are now in plans that spend more than 30 cents of every premium dollar on administrative costs, while 25 percent more are in plans that spent 25 to 30 cents on such costs.
Once this new regulation takes effect, he said, up to 74.8 million insured Americans will be protected from excessive insurer spending, and up to 9 million may be eligible for rebates starting in 2012, worth up to $1.4 billion and possibly averaging as much as $164 per person in the individual market.
“By pledging to repeal health reform, House Republicans would eliminate this important protection and allow insurance companies to continue unlimited spending on CEO bonuses, profits and lobbying – and less on patients’ health care,” Stark said. “The Republican response to today’s announcement will be telling. Will they stand with working families or the health insurance industry?”