White House White Board: Your Healthcare Dollar

Uploaded by whitehouse on 22.11.2010

Nancy-Ann DeParle: Hi, I'm Nancy-Ann DeParle, Director of the White House
Office of Health Reform.
Today I want to talk to you about a new policy that we're
implementing that will make a big difference in the value of
the health care that you get and it's called the Medical
Loss Ratio Policy.
Now, medical loss ratio sounds complicated but it's really a
pretty basic concept.
Insurance companies are private businesses and they take in
premium dollars from you and then they spend a percentage
of that on your health care.
And medical loss ratio just refers to the percentage that
they spend on your health care versus the spending that they
have on their overhead and on their executive compensation and
salaries and the other things that they do.
So right now this is sort of all over the lot.
Some insurance companies are paying a good chunk of your
premium dollar on your actual health care costs.
But some of them are spending only about 50%.
So only about 50% of your premium dollar actually goes
to your health care; the rest of it goes to their administrative
expenses and executive compensation and salaries.
What this new rule does is ensure that as a consumer
when you give an insurance company a premium dollar,
that 80% of it will be spent on your health care.
That means that you as a consumer are going to get
more value for your dollars.
Now, if an insurance company in 2012 doesn't do that,
they owe you money back.
So they can either lower your premiums or they can
pay you a rebate back.
And the best news is this will be transparent.
You will know.
It will be public.
You'll know how much your premium dollars your insurance
company is spending towards your health care.
This Medical Loss Ratio Policy is only one way
that the Affordable Care Act is making your health care
system better for you.
To find out more, I hope you will check out healthcare.gov
which will give you more information about the Patient's
Bill of Rights and the other new protections that have gone into
place this year under the Affordable Care Act.
There is a neat tool on there where you can actually use it
to help find out what options are available in your area.