Obamacare saved consumers $9 billion, but that's not as much as it sounds

A new Obama administration report found the health-care law forced health insurers to refund 6.8 million consumers more than $330 million in 2013, for an average of $80 per family. The report also estimates that the health-care law led to $9 billion in premium savings since 2011 in part by getting insurers to cut back on administrative costs and profits.

The savings and refunds come through what's known as the medical loss ratio (MLR), which measures how much premium revenue goes to medical care or programs that improve health-care quality instead of, for example, administrative costs or profits.

The health-care law's 80/20 rule requires insurers keep their MLR at 80 percent or more, depending on the size of the plan. If an insurer falls below the required MLR, the difference must be repaid to consumers. The idea is to discourage excessive profits or administrative costs in health plans that could push up premiums for consumers.

But the 80/20 rule's impact is actually pretty small

Americans pay about $900 billion in premiums to private insurers each year, so the $330 million in refunds only accounts for nearly 0.04 percent of all premiums. The $9 billion in savings since 2011, meanwhile, account for about 0.1 percent of all premiums over the three-year period.

Most insurers already met the 80/20 rule prior to its implementation. A recent Government Accountability Office report found 76 percent of insurers hit or exceeded the standards in 2011, the year before the rule kicked in. That number rose slightly, to 79 percent, in 2012.

Insurers told the GAO that Obamacare's MLR requirements had little influence on their pricing decisions. Only three of eight insurers interviewed by the agency said MLR requirements were an issue in pricing decisions; even for those insurers, MLR was only one of several factors.

MLR isn't the only way Obamacare tries to save insurers money. For a deeper dive into Obamacare's cost-saving programs, read Vox's full explainer. For an additional idea to cut health-care costs that's not included in Obamacare, watch the video below:

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