John Kerry: “the Affordable Care Act helped to ensure that insurance companies spend a substantial portion of premium dollars on…”

“the Affordable Care Act helped to ensure that insurance companies spend a substantial portion of premium dollars on medical care and health care quality improvement, rather than on administrative costs and profits. However, due to remaining discrepancies not all Medicare beneficiaries are afforded the same protection under the law. Medical loss ratios make the insurance marketplace more transparent and make it easier for consumers to purchase plans that provide better value for their money. Beginning this year, the medical loss ratio provision in the Affordable Care Act requires insurance policies sold in the individual and small group markets to spend 80 percent of premium dollars on medical care. Policies sold in the large group market are required to spend 85 percent of premium dollars on medical care. Insurance companies that fail to meet this standard are required to provide a rebate to their customers beginning in 2012. The Affordable Care Act also required Medicare Advantage plans to spend 85 percent of premium dollars on medical care starting in 2014 or they would be required to refund the difference to the Federal Government. Compared to most other insurance products, Medigap policies now have lower statutory minimums for the percentage of premium dollars that must be spent on medical care. Under current law, Medigap policies must meet a minimum medical loss ratio of 65 percent in the individual market and 75 percent in the group market.…”