Defend Your Health Insurance Refund Dollars!

  • by: Consumers Union
  • target: Your State Health Commissioner and U.S. House Representative
Americans could be due more than $1 billion in refunds from insurance companies that waste our premium dollars. And with the deadline looming for refund checks to be cut this summer, the lobbyists are doing all they can to undermine this new law.

Early reports show that the 'medical loss ratio' provision in the Affordable Care Act is actually bringing costs down through premium refunds. But state Insurance Commissioners responsible for protecting you are under pressure from the insurance industry to back off.

Tell them to fight for you! Getting a handle on skyrocketing insurance costs is important to everyone, and holding companies accountable for how they spend your premium dollars can bring costs down.
Dear [Decision Maker],

Residents of our state need help with spiraling health insurance costs -- and early reports show that the 'medical loss ratio' provision in the Affordable Care Act is actually bringing costs down through premium refunds. I urge you to strongly support and enforce this provision, and do all you can to make sure the law works so I get real value for my insurance dollars.

[Your comments here]

Getting a handle on runaway insurance costs is important to our state, and you play a key role in making that happen. Under the law, insurers can't spend more than 20 percent of my premium on their administrative costs, CEO salaries and excessive profits. Spend more, and they must lower rates or refund policyholders the difference.

This rule is already making a difference. Countless insurance companies are working smarter and bringing down their overhead costs to comply, and there is no evidence that it is impacting our health care. Some examples of the law's success:

-- Small-business owners in Florida covered by Blue Cross Blue Shield can expect $45 million in refunds this summer, a real boost to struggling businesses.

-- A WellPoint insurance company in Missouri estimates $9.3 million in refunds to individual policyholders and another $20 million to small-business owners.

-- Blue Cross Blue Shield of Arizona foresees rebates of $3.2 million to small business customers and $8.7 million to individual policyholders.

-- Humana in Wisconsin spent about 28 percent of premium dollars from its small business customers on administrative overhead in 2010, but spent just under 17 percent in 2011.

-- A Wisconsin insurance official noted that as of September 2011, at least three companies asked for rate decreases.

These are examples of real, significant savings, ultimately making health insurance more affordable for residents of our state. Please support and enforce the medical loss ratio rule, and make sure I get real value for my insurance dollars.
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