Congresswoman Richardson Praises Implementation of New Consumer Protections Ensuring Families Get More For Their Health Insurance Premiums
Another Example of How Health Reform Is Holding Insurance Companies Accountable and Providing Key Protections to Consumers
Congresswoman Laura Richardson praised the announcement today by HHS of new regulations implementing critical provisions of the health reform law that provide key protections for consumers. These “medical loss ratio” provisions require health insurers to spend 80 to 85 percent of consumers’ premiums on direct care for patients and efforts to improve care quality. If they don’t, the insurance companies will be required to provide a rebate to their customers starting in 2012. These regulations also provide consumers more transparency – requiring insurance companies for the first time to publicly report how they spend premium dollars.
“The HHS announcement today is one more example of how health reform is putting consumers first and ensuring that Americans get the full value of their premium dollar,” said Congresswoman Richardson.
Today, many insurance companies spend a substantial portion of consumers’ premium dollars on administrative costs and profits, including executive salaries, overhead, and marketing. Specifically, currently in the individual market, over 20 percent of consumers are in plans that spend more than 30 cents of every premium dollar on administrative costs and an additional 25 percent of consumers are in plans that spend between 25 and 30 cents of every premium dollar on administrative costs. Under these new protections, millions of Americans will begin getting better value for their premium dollar.
The implementation of these new consumer protections will begin on January 1, 2011 – with rebates beginning in 2012.
These important consumer protections are another example of how health reform is helping Americans even before full implementation of the law in 2014. Since health reform was enacted in March, numerous provisions have taken effect, including:
· More than 1.8 million seniors who have fallen into the Medicare prescription drug ‘donut hole’ coverage gap have received a $250 rebate check to help pay for their prescription drugs.
· Beginning for tax year 2010, up to 4 million small businesses are eligible for small business tax credits to help pay for health insurance premiums for their employees if they choose to offer coverage.
· Nearly 3,600 employers are now participating in the Early Retiree Reinsurance Program, which is designed to retain early retiree health plans until full reform is implemented in 2014 by providing financial assistance for employer health plans offered to early retirees.
· Many Americans with pre-existing conditions now have access to federally-subsidized Pre-Existing Condition Plans, which exist in every state.
· Millions of Americans are now receiving the benefits of the Patient’s Bill of Rights, which went into effect for plan years beginning on or after September 23, 2010. Among its many provisions, the Patient’s Bill of Rights:
• Prohibits insurers from dropping people when they get sick.
• Requires insurers to allow parents to keep their young adult children up to age 26 on their health plan as their children work to launch their careers.
• Bans insurers from putting lifetime limits on coverage.
• Bans insurers from denying coverage to children with pre-existing conditions; and
• Requires insurers to cover key preventive services, such as mammograms and immunizations, without deductibles or co-payments.
“The step today is another step forward in implementing health reform and putting Americans, not the insurance companies, back in charge of their health care,” said Congresswoman Richardson .”In their stated plans to work to repeal health reform, House Republicans would be eliminating these key new consumer protections and would allow insurance companies to continue unlimited spending on CEO bonuses and profits — and less on patients’ health care. Democrats will continue to fight to protect the progress we have made for our nation, especially health care reform.”
Congresswoman Richardson is a Democrat from California’s 37th Congressional District. She is a member of the House Committees on Transportation & Infrastructure and Homeland Security and is chair of the Homeland Security Subcommittee on Emergency Communications, Preparedness and Response. Her district includes Long Beach, Compton, Carson, Watts, Willowbrook and Signal Hill.