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Sat Jul 20, 2013, 03:43 PM

Private Health Insurance premiums were $3.4 billion LOWER in 2012, in part due to the "80:20 rule"


"In total, the administration says the 80/20 standard contributed to $3.4 billion in lower premiums for 77.8 million consumers because health insurance companies charged less up front. "Their incentive will be to keep their premiums at a level where they would at least meet the 80/20 rule," Cohen said."

"In addition to the $500 million in rebates that will go out to individuals in the form of refunds this year or discounts on next year's health insurance premiums, or to employers that provide health benefits, the Obama administration claims the 80/20 rule contributed to lower premiums in 2012.

Health insurance customers received $1.1 billion in rebates last year on their 2011 premiums, more than twice the amount projected for this year. That's partly the result of companies keeping prices lower in 2012 to avoid paying rebates, Cohen said."

"I don't think that we are claiming that the $3.9 billion in savings is entirely due to the 80/20 rule," he said. "But what we are saying is this year compared to last year, what we are seeing is the loss ratios are going up, [font size="3"]administrative costs as a percent of premiums are going down and the law is having its intended effect of making insurers more efficient, more cost-effective and providing more value to consumers[/font]."

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