Here’s some good news to come out of the Democratic health care reform legislation:
The request by Anthem Blue Cross to increase premiums by as much as 39% for its California customers has been withdrawn by the company, citing provisions in the new health care reform law. Under the provisions of the Patient Protection and Affordable Care Act, commercial insurers must maintain an 80% “medical loss ratio” for individual insurance policies beginning January 2011, meaning insurance companies must allocate 80 cents out of every premium dollar to providing health care to their customers, while the remaining 20 cents can be used to pay other expenses, including salaries, overhead, and profits. In a statement released last week, Anthem, a subsidiary of WellPoint, said the decision to withdraw its rate request was taken “to meet our current understanding of this requirement in advance of the effective date.”
I know this is just one example from one state, but hopefully this is the first of many examples of how the Patient Protection and Affordable Care Act will help lower health insurances costs for consumers.
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