Statement by Secretary Kathleen Sebelius on Blue Shield of California Consumer Rebates

WASHINGTON--(BUSINESS WIRE)-- “We applaud Blue Shield of California’s decision to limit their profits and give $180 million back to policyholders, physicians and hospitals. This is a great step forward in lowering costs for the people of California and we are pleased that Blue Shield is committed to providing better care at prices that better reflect underlying medical costs. While such voluntary efforts are great for Blue Shield’s policyholders in California, today’s announcement also reinforces the importance of the Affordable Care Act and rigorous State review of insurance rates.

The Affordable Care Act guarantees that every American, regardless of who insures them, is protected from industry abuses while helping to ensure access to quality affordable coverage.

Two new rules, in particular, provide unprecedented scrutiny and transparency in the health insurance market and press insurers to do more to control premiums and limit administrative costs. The first is the new rate review rule which requires insurers to justify unreasonable premium rate increases and post that information on the Web for the public to see. The second is the medical loss ratio rule which ensures that a greater percentage of consumers’ premiums are being spent on health care and improving the quality of care, not on advertising and executive salaries. We have also provided States – including California – with additional resources to strengthen their review of proposed premium increases or to help change State law to give the State the authority to block or deny increases that are found to be unjustifiably high.

Working together with the comprehensive reforms included in the Affordable Care Act, these rules work to create a new marketplace to help put consumers in better control of their health care.”

Background on the Affordable Care Act

The Affordable Care Act includes a wide variety of provisions designed to promote a high-quality, high-value, health care system for all Americans and to make the health insurance market more consumer-friendly and transparent. Some of the provisions that have already taken effect include prohibitions on pre-existing condition exclusions for children; prohibition on lifetime dollar limits in all health plans; extended access to insurance for many young adults; and an unprecedented level of transparency about health insurance through When the Affordable Care Act is fully implemented in 2014, individuals and small businesses will have access to affordable coverage through a new competitive private health insurance market – State-based Health Insurance Exchanges.

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KEYWORDS:   United States  North America  California  District of Columbia

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