According to the law, health insurers are now required to report how funds from consumer premiums are spent – specifically, how much goes toward health care costs versus administration. This rule, known as the 80/20 rule, limits the portion of premiums spent on administration to 20%. 80% of each premium dollar must pay directly for health care costs – and insurers that exceed the limit must refund any amount over the 20% ceiling.
Nationally, more than 12.5 million consumers will receive rebates totaling $1.1 billion. This will provide workers and families with a much-needed economic boost – money to spend on groceries, school supplies and car repairs. Small businesses will benefit too, with nearly a third of total U.S. rebates going to small employers.
The benefits of the 80/20 rule extend beyond the rebates. Because premium increases greater than 10% are subject to a new review process, consumers can expect to see a flattening of their premium costs. Business owners who have experienced double-digit percentage increases in premium costs over years past are now seeing only nominal increases – or even decreases – as they renew employee plans.
These policy changes are necessary to ensure individuals and families are able to access to care, particularly as ever-growing health costs have put coverage out of reach for middle class families and small businesses. As health reform implementation moves forward, Washingtonians can expect to see more affordability and increased access to the care they need and deserve.
In Washington state, rebates will total $594,031, an average of $185 for 7,681 households. Insurers must pay rebates by August 1, 2012.
More To Read
November 21, 2022
Register for our Session Kickoff Event Today: January 5th, 2023
November 17, 2022
Elected leaders must make addressing healthcare costs a top priority
October 25, 2022
A wealth tax is the missing link to Washington’s tax code