The Rate Review Program strengthened the capacity of states to review – and reject – proposed insurance-rate increases of more than 10 percent. This saved Americans $1 billion on proposed rate increases that were either reduced or withdrawn during the review process, according to the Health and Human Services report.
The Medical Loss Ratio stipulates that insurance companies that provide individual and small-group plans must spend at least 80 percent of premium dollars on health-care benefits and only 20 percent on administrative costs and profits. Companies that spend less than 80 percent on health-care benefits must provide rebates to their customers. The additional $1.1 billion in savings came through this so-called 80/20 rule.
