That’s the amount consumers saved last year under new health care reform rules that forced health insurance companies to become more efficient.
According a study by the Commonwealth Fund and reported by The Huffington Post, the Obama administration’s new health care law requires health insurance companies selling plans to individuals to spend at least 80 percent of the premiums they collect on medical care. Companies selling plans to groups of more than 50 must spend 85 percent of premiums on medical care. If a company fails to comply with these rules, they must refund the difference to their customers.
The Commonwealth Fund found that because of these rules, health insurance companies issued $1.1 billion in rebates and cut administrative costs and profit by $350 million
Those who buy individual health insurance plans saw the biggest benefits, receiving $394 million in rebates. However, health insurance companies saw their profit margins fall – from 0.15 percent to -1.2 percent, and their profits fell by $351 million. These negative profit margins could make it harder for consumers in finding coverage in the future.