Healthcare Law Saves Consumers Money, Provides Resources to States

Courtesy HHS.gov

September 19, 2014

Consumers saved $1 billion in 2013 and states receive more funding to continue to 

scrutinize rate hikes

Health and Human Services Secretary Sylvia M. Burwell released a new report showing that in 2013 alone, consumers benefitted from $1 billion in savings from lower than originally requested health insurance rates.  This includes $290 million in savings for individuals and families, and $703 million in savings for small employers. Combined with refunds consumers received because of the 80/20 rule, consumers saved more than $2.8 billion in 2012 and 2013. Secretary Burwell also announced roughly $25 million in rate review grant awards to 21 states.

The Affordable Care Act is bringing greater scrutiny and accountability to health insurance premium increases, resulting in big savings for consumers.  Because of the law's "rate review" provision and state efforts, consumers are continuing to benefit from lower than requested premium increases.

"Before the Affordable Care Act, consumers regularly faced significant annual premium increases," said Secretary Burwell.  "In 2013 alone, we see that rate review programs saved consumers approximately $1 billion while providing them with the information they need to get the care they deserve."

Before the Affordable Care Act, annual premium increases were often in the double digits.  Insurance companies were able to raise premiums without explaining their actions to regulators or the public or justifying the reasons for their high rates to consumers.  Now, the law requires insurance companies in every state to publicly justify any rate increase of 10 percent or more.  Consistent with previous years since the rate review provision went into effect, today's report shows that the implemented rate increases were smaller than what was originally requested across both the individual and small group markets.

The Affordable Care Act provides states with Health Insurance Rate Review Grants to enhance their rate review programs and bring greater transparency to the process.  Today's awards will continue to support state efforts to enhance their review of health insurance rate increases, educate consumers, help hold insurance companies accountable, and to scrutinize medical pricing data.  States getting these awards include: Arizona, Arkansas, California, Delaware, Hawaii, Indiana, Kentucky, Maine, Maryland, Massachusetts, Michigan, Minnesota, Nevada, New Hampshire, New Jersey, Oregon, Rhode Island, Utah, Vermont, Washington, and Wisconsin.  These grants are also supporting data centers that, among other activities, expand the availability of medical pricing information available to consumers, businesses, and entrepreneurs.

Rate review is one of many initiatives in the health care law aimed at saving money for consumers and it works in conjunction with the 80/20 rule. The 80/20 rule, also known as the Medical Loss Ratio (MLR) rule, requires insurers to spend at least 80 percent of premium dollars on patient care and quality improvement activities.  If insurers spend an excessive amount on profits and red tape, they owe a refund back to consumers.  The combined amount of refunds and lower than originally requested rates resulted in more than $2.8 billion in savings for consumers in 2012 and 2013.

  HHS Spurs Innovation to Develop Next-Generation Portable Ventilator

Courtesy HHS.gov

September 17, 2014

 Low-cost, user-friendly ventilators needed for pandemics, routine care

The U.S. Department of Health and Human Services will sponsor the advanced development of a next-generation portable ventilator to help fill the need for portable, low-cost, user-friendly and flexible ventilators in a pandemic or other public health emergency. The new ventilator will be developed under a three year, $13.8 million contract with Philips Respironics of Murrysville, Pennsylvania.

The project will be overseen by the Biomedical Advanced Research and Development Authority (BARDA) within the HHS Office of the Assistant Secretary for Preparedness and Response.

"In pandemics and other emergencies, doctors must have medicines, vaccines, diagnostics, and critical equipment such as mechanical ventilators at the ready in order to save lives," said BARDA Director Robin Robinson, Ph.D.

In a severe influenza pandemic and potentially in other public health emergencies, a large number of severely ill patients would require mechanical ventilation. This number could overwhelm the capacity of the health care system to provide such care, both in the number of ventilators available and staff trained to operate them.

The innovative ventilator in development will leverage advanced technology to reduce the size and cost and will be designed in a way that doctors, nurses and other health professionals can operate without special training. The next-generation ventilator also will be designed to be manufactured quickly to meet a surge in the number of patients who need ventilators if more ventilators are needed than could be stockpiled.

Under today's contract, the ventilator will be required to meet the needs of everyone from infants to the elderly. To make the new ventilator suitable for stockpiling, the portable equipment must be low-cost. Ventilators with all the required features currently cost from $6,000 to $30,000 per unit.

Under today's agreement, Philips Healthcare will develop a next-generation ventilator that could be stockpiled by the federal government, including accessories for children and elderly patients. The contract includes an option to purchase 10,000 completely kitted, initial production ventilators for $32.8 million.

In addition to aiding in response to a public health emergency, the next-generation ventilator in development can have important implications for routine care. The modernized features, agility, and ease of use can improve patient care for triage in the field or advanced treatment in the hospital.

HHS is the principal federal agency for protecting the health of all Americans and providing essential human services, especially for those who are least able to help themselves. To learn more about HHS, visit  www.hhs.gov  and to stay up to date on flu, visit www.flu.gov.

The Office of the Assistant Secretary for Preparedness and Response (ASPR) leads HHS in preparing the nation to respond to and recover from adverse health effects of emergencies, supporting communities' ability to withstand adversity, strengthening health and response systems, and enhancing national health security. To learn more about ASPR and preparedness, response and recovery from the health impacts of disasters, visit the HHS public health and medical emergency website, www.phe.gov.  

Within ASPR, the Biomedical Advanced Research and Development Authority (BARDA) develops and procures medical countermeasures - vaccines, medicines, diagnostics and medical equipment - that address the public health and medical consequences of chemical, biological, radiological, and nuclear (CBRN) accidents, incidents and attacks, pandemic influenza, and emerging infectious diseases.