What Obama’s Done For You Lately: Lower Insurance Premiums

The number of people who love health care reform plus the number of people who hate health care reform is considerably larger than the number of people who actually understand health care reform. John and Jane Q. Public were outraged that Congress voted on a bill that “they hadn’t even read” although Mr. and Mrs. Public didn’t read it, either. It’s unfortunate, because the Affordable Care Act, despite some of its shortcomings, actually does a lot of wonderful things. One of those things is put some regulations in place on the health insurance industry.

In particular, the ACA requires insurers to be more transparent about how they’re spending your premium dollars and places caps on the rate at which insurers can increase your premiums. This might not seem like a huge deal to you at first, because most of us get our insurance through our employers, and our employers pick up the majority of the tab, but according to the Department of Health and Human Services, these regulatory provisions are adding up. According to a recent report, the ACA has saved consumers $2.1 billion over the last year.

The savings come from two different provisions of the law. First, insurers are prevented from raising their premium rates by more than 10% without submitting public justification for the rate hike and receiving approval from state insurance departments. This, according to HHS, has slowed premium growth and saved $1 billion since September 2011. Second, the ACA requires insurers to devote at least 80 cents of every premium dollar to providing health care. This also provides an incentive for insurers to hold rates down, but more importantly, it puts money back into consumers’ pockets. If an insurance company doesn’t meet the 80% threshold, they have to refund the difference to their beneficiaries. This, according to HHS, adds up to another $1.1 billion since September 2011.

Of course, most of us probably won’t be getting a refund check in the mail, but those who do can expect it to average around $151. So, what has Obama done for you lately? Well, for many of you, go look in your mailbox, because his administration may just have arranged for you to get a refund check from your insurance company. If there’s anyone out there who doesn’t like that, might I suggest that you cash your check, send me the proceeds, and vote for Mitt Romney?

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