MLR provision cost insurers $2.1B in rebates

The reform law's medical-loss ratio provision saved consumers more than $2 billion in only one year, says a new study published Thursday.

The Kaiser Family Foundation study estimated that without the MLR rule, consumers' premiums would have been $1.9 billion higher in 2012. Plus, consumers received $241 million in rebates last year, bringing the total savings as a result of MLR requirements to $2.1 billion in 2012, according to the study.

"Taking into account both premium savings and estimated rebates, people purchasing insurance on their own in 2012 spent 7.5 percent less on average on insurance than they might otherwise have in the absence of the law," the study authors wrote.

Blue Shield of California and Anthem Blue Cross, for example, owe their consumers a combined $36.5 million in rebates, which will be issued later this year.

Some consumer advocates believe insurers should cut "upfront premiums rather than reimburse consumers afterward," Jon Fox, consumer advocate at the California Public Interest Research Group Education Fund, told the Los Angeles Times. "Millions of dollars in rebates are a clear sign that health insurers are overcharging consumers."

"[P]redicting the cost of care is an inexact science," Anthem spokesman Darrel Ng said told the LA newspaper. "In one portion of our business, we spent less than we anticipated on medical claims."

To learn more:
- here's the study
- see the Los Angeles Times article