As Washington’s political class looks warily toward the implementation of Obamacare during the 2014 election year, a little-known piece of the law backed by U.S. Sen. Al Franken has saved consumers in the individual market an estimated $2.1 billion, according to a new analysis by the Kaiser Family Foundation.
The report, which was hailed by the Minnesota Democrat's office Thursday, shows how the so-called medical loss ratio implemented in 2011 has reduced insurers' administrative costs and profits by requiring them to issue rebates if they fail to spend a certain amount of premium dollars on health care expenses.
The savings include some $241 million in rebates that insurers estimate they will pay to customers in the individual market this year based on their performance in 2012.
The rule requires insurers to spend at least 80 cents of every premium dollar on medical care. The proportion insurers must spend goes up to 85 cents for policies sold to large employers.
The report is particularly welcome for Franken, who is running for reelection in a year when the public will get its first real taste of the insurance exchanges being set up under President Obama’s controversial health care overhaul.
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