â€śObamacare,â€ť President Barack Obamaâ€™s controversial health care reform law, has already saved consumers over $1 billion according to a new study from the Commonwealth Fund.
Although several major parts of the legislation have not even taken effect yet, some of the new rules regarding insurance companies have already had a major impact.
For instance, health insurance companies selling plans to groups of at least 50 people must spend 85 percent of premiums on medical care. Companies that fall short of that mark under the medical loss ratio rule have to refund the difference to their customers.
â€śThe medical loss ratio requirements are intended to give insurers an incentive to be more efficient and use most of their premium dollars for patient care,â€ť Sara Collins, the vice president for affordable health insurance at the New York-based Commonwealth Fund, said in a news release. â€śThis report is encouraging, as it demonstrates that these new rules are improving value for people buying health insurance.â€ť
According to the study, insurance companies doled out $1.1 billion in rebates, and cut administrative costs and profit by $350 million because of the new rules.
â€śGoing forward, if insurers are not able to balance overall profitability in this manner, some might choose to withdraw from less-profitable market segments, which could leave consumers with fewer choices as well as higher premiums,â€ť wrote the studyâ€™s authors Michael McCue of Virginia Commonwealth University in Richmond and Mark Hall of Wake Forest University of Winston-Salem, N.C..
These Obamacare reforms continue to met with considerable resistance from the insurance industry.
â€śThere is broad recognition that health care costs are rising at an unsustainable rate. But the data are very clear that soaring medical costs â€” not health plansâ€™ administrative costs â€” are driving health care cost growth,â€ť read a statement issued Wednesday by Americaâ€™s Health Insurance Plans.