Budget Blog

The Department of Health and Human Services announced today that a consumer protection in the Affordable Care Act (ACA) has saved American families $9 billion in unnecessary health care costs since 2011. The ACA includes a provision called the Medical Loss Ratio, or 80/20 rule, which requires insurers to give consumers a refund if they spend excessively outside of medical care in ways that drive up costs on the backs of consumers, like high executive salaries and conferences at resorts. Thanks to the ACA, insurers must spend at least 80 cents of every premium dollar on patient care and improving the quality of health care delivery. 

The 80/20 rule is bringing down costs throughout our health care system and is also delivering savings to families across the country. In the last year alone, consumers nationwide saved $3.8 billion in health care costs due to this rule as insurers operated more efficiently and gave consumers more value for their dollars. Just in 2013, insurance companies that overcharged consumers delivered rebates of more than $332 million to almost 7 million people, with the average family receiving $80. In Washington State, insurers refunded nearly $800,000, giving Washingtonian families on average $122.

Today’s report is one more example of how the ACA is making quality health care coverage more affordable for working families across the country.

Read more about these savings here.