Insurance Rates $3.9B Lower Under ACA Spending Cap

Law360, New York (June 20, 2013, 3:34 PM EDT) -- An Affordable Care Act provision capping how much health insurance companies can spend on overhead saved consumers $3.9 billion on premiums last year, the Obama administration reported Thursday in its latest effort to allay concerns that guaranteed benefits would send rates soaring.

The so-called medical loss ratio prompted insurers to rein in their administrative costs, resulting in $3.4 billion worth of "upfront value" in the form of lower premiums, according to the Centers for Medicare and Medicaid Services.

In the markets for individuals and small businesses,...
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