Now comes word that in 2011 and 2012, health insurance companies sent out rebates totaling $1.5 billion. But get this, they also cut their profits/admin costs.
The rule also led insurance companies to reduce their own profit margins, spending on brokers fees, marketing and others administrative costs to the tune of $1.4 billion. These costs are overhead fees that insurance companies have typically pushed on to their customers.An elementary understanding of math says that health insurance companies paid $2.9 billion over those two years (rebates + cost reductions) for the privilege of gaining customers on the health insurance exchanges who cannot be denied coverage based on pre-existing conditions. Excuse me while I laugh at those who said Obamacare was nothing more than a big give-away to them :-)
“The Affordable Care Act has changed how health insurance is bought, sold, and managed and, on balance, those changes have produced substantial benefits for consumers without harming insurance markets,” said Michael McCue, the study’s lead author. “In its first two years, the MLR requirement contributed to a significant reduction in insurance administrative costs, a major source of health care cost growth in the United States.”