About $2 billion in health insurance rebates would have been issued to over 15 million American consumers if the Affordable Care Act’s new medical loss ratio (MLR) rules had been in effect in 2010, a new study from The Commonwealth Fund reveals. The MLR rules, which were enacted in 2011, require a minimum percentage — ranging anywhere from 80–85 percent — of premium dollars to be spent on medical care and health care quality improvement, as opposed to administrative costs and corporate profits. The report, Estimating the Impact of the Medical Loss Ratio Rule: A State-by-State Analysis, estimates that had the MRL rule gone into effect a year earlier, the 5.3 million Americans with individual health insurance coverage would have received nearly $1 billion in rebates, while another $1 billion in rebates would have been awarded to the 10 million Americans with policies in both small and large group markets. Twenty-three percent of privately insured consumers in all markets would have received rebates.
Federal health officials estimate $323 million in MRL rebates for the first year (starting in 2011), “with the first round due to be paid by Aug. 1 this year, and each year thereafter.”