RE­FORM:

HHS re­port: ACA pro­vi­sions saved $2.1 bil­lion

Modern Healthcare - - MODERN HEALTHCARE - Jes­sica Zig­mond

HHS re­port es­ti­mates the ACA has racked up $2.1 bil­lion in sav­ings so far

An HHS re­port found con­sumers saved bil­lions from in­sur­ance pro­vi­sions in the health­care re­form law, but crit­ics dis­missed it as cam­paign fluff.

Ac­cord­ing to the anal­y­sis, the Pa­tient Pro­tec­tion and Af­ford­able Care Act’s ratere­view re­quire­ment—which makes in­sur­ance com­pa­nies jus­tify pre­mium-rate in­creases of 10% or more—saved con­sumers about $1 bil­lion since the pro­vi­sion took ef­fect last Septem­ber.

An­other $1.1 bil­lion in sav­ings, the re­port said, came from the statute’s med­i­cal-loss­ra­tio pro­vi­sion, which re­quires in­sur­ers to spend at least 80 cents of ev­ery pre­mium dol­lar on med­i­cal ex­penses or else pay the dif­fer­ence to con­sumers through re­bates.

HHS has dis­trib­uted about $160 mil­lion of $250 mil­lion the law pro­vided for grants to help states re­view rate in­creases. But Thomas Miller, res­i­dent fel­low at the con­ser­va­tive Amer­i­can En­ter­prise In­sti­tute in Wash­ing­ton, ques­tioned whether HHS could rightly claim credit for tam­ing pre­mium hikes, not­ing that most states used their ex­ist­ing author­ity to re­view rates.

Gary Co­hen, di­rec­tor of HHS’ Cen­ter for Con­sumer In­for­ma­tion and In­sur­ance Over­sight, said states made 69% of the ratere­view de­ter­mi­na­tions, while HHS de­cided

on the re­main­ing 31%.

The AEI’s Miller also said HHS is claim­ing credit for other fac­tors that are keep­ing pre­mi­ums down. “If you want to bring health­care down, they’ve got a fool­proof ap­proach: De­press the econ­omy,” he said. “If peo­ple don’t have money, they won’t buy ex­pen­sive health in­sur­ance.”

On Capi­tol Hill, Sen. Mike Enzi (R-Wyo.), the rank­ing mem­ber on the Se­nate Health, Ed­u­ca­tion, La­bor and Pen­sions Com­mit­tee, called the re­port “an elec­tion-year gim­mick that ig­nores the true to­tal cost in­creases of the new health­care law.”

Enzi also noted in a state­ment that the Kaiser Fam­ily Foun­da­tion and Health Re­search & Ed­u­ca­tion Trust found that fam­ily health­care pre­mi­ums are 4% higher this year than in 2011. “What this ad­min­is­tra­tion does not want peo­ple to know is that the new man­dates con­tained in the health­care law are sig­nif­i­cantly in­creas­ing the cost of in­sur­ance, which will make it harder for many Amer­i­cans to pur­chase af­ford­able cov­er­age.”

A Kaiser and HRET news re­lease about the find­ing, based on a sur­vey of 2,000 large and small busi­nesses, char­ac­ter­ized the 4% growth rate as “mod­er­ate by his­tor­i­cal stan­dards,” though still out­pac­ing wages.

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