Way #5: Increased Accountability and Transparency on Insurance Costs

 Wisconsin families are benefiting in two major ways from the increased accountability and transparency in our health care system brought about by the Affordable Care Act (ACA): (1) the “Medical Loss Ratio” (MLR); and (2) rate review requirements. The ACA requires insurance companies to spend a large percentage of the money they take in from premiums on health care services. And they have and to justify any significant rate increases. Both of those ACA features are helping to ensure that Wisconsin families have access to affordable coverage. Medical Loss Ratio (MLR)
Under the ACA, insurers are required to spend at least 80 to 85% of premium revenue on health care, as opposed to administration or marketing. If insurers fail to comply, they must send consumers rebate checks. The Wisconsin Office of the Commissioner of Insurance (OCI) requested an exemption from the federal government from MLR requirements, hoping instead to have those percentages phased in over time. The federal government denied that request, noting that the majority of insurers in Wisconsin could reasonably meet this standard. The Kaiser Family Foundation estimates that across the individual, small group, and large group market, Wisconsin health care consumers will be receiving over $16.8 million in rebates in 2012.

Rate Review
Another increase in accountability and transparency is the ACA’s rate review requirement. Like MLR, this requirement protects consumers from excessive insurance costs. It does so by requiring insurers to publicly justify any increase of over 10%. As with MLR,the state requested an exemption from the 10% threshold currently in place. The state proposed that they be allowed to conduct their own research to determine what review rate marker would be appropriate. As with MLR, the federal government denied OCI’s request.

For Wisconsin families, the benefits of the ACA stretch far beyond increasing access to coverage for families. It ensures that Wisconsinites are receiving quality, affordable care by requiring that their premium dollars be spent on health care and by making sure premium increases are only made if necessary.

Lacy Langbecker
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As we wait anxiously for the Supreme Court to issue their decision on the Affordable Care Act (ACA), we know that children and families in Wisconsin are already benefiting from the law. It is important to recognize these ways in which the ACA is already making an impact and what could be lost if the Court strikes down the whole law. This is one in a series of blog posts highlighting what we think are the top ten ways children and families in Wisconsin are already benefiting from the health care reform law.