42 USC 300gg-18 - Bringing down the cost of health care coverage

U.S Code last checked for updates: Nov 26, 2024

§ 300gg–18.

Bringing down the cost of health care coverage

(a)

Clear accounting for costs

A health insurance issuer offering group or individual health insurance coverage (including a grandfathered health plan) shall, with respect to each plan year, submit to the Secretary a report concerning the ratio of the incurred loss (or incurred claims) plus the loss adjustment expense (or change in contract reserves) to earned premiums. Such report shall include the percentage of total premium revenue, after accounting for collections or receipts for risk adjustment and risk corridors and payments of reinsurance, that such coverage expends—

(1)

on reimbursement for clinical services provided to enrollees under such coverage;

(2)

for activities that improve health care quality; and

(3)

on all other non-claims costs, including an explanation of the nature of such costs, and excluding Federal and State taxes and licensing or regulatory fees.

The Secretary shall make reports received under this section available to the public on the Internet website of the Department of Health and Human Services.

(b)

Ensuring that consumers receive value for their premium payments

(1)

Requirement to provide value for premium payments

(A)

Requirement

Beginning not later than January 1, 2011, a health insurance issuer offering group or individual health insurance coverage (including a grandfathered health plan) shall, with respect to each plan year, provide an annual rebate to each enrollee under such coverage, on a pro rata basis, if the ratio of the amount of premium revenue expended by the issuer on costs described in paragraphs (1) and (2) of subsection (a) to the total amount of premium revenue (excluding Federal and State taxes and licensing or regulatory fees and after accounting for payments or receipts for risk adjustment, risk corridors, and reinsurance under sections 18061, 18062, and 18063 of this title) for the plan year (except as provided in subparagraph (B)(ii)), is less than—

(i)

with respect to a health insurance issuer offering coverage in the large group market, 85 percent, or such higher percentage as a State may by regulation determine; or

(ii)

with respect to a health insurance issuer offering coverage in the small group market or in the individual market, 80 percent, or such higher percentage as a State may by regulation determine, except that the Secretary may adjust such percentage with respect to a State if the Secretary determines that the application of such 80 percent may destabilize the individual market in such State.

(B)

Rebate amount

(i)

Calculation of amount

The total amount of an annual rebate required under this paragraph shall be in an amount equal to the product of—

(I)

the amount by which the percentage described in clause (i) or (ii) of subparagraph (A) exceeds the ratio described in such subparagraph; and

(II)

the total amount of premium revenue (excluding Federal and State taxes and licensing or regulatory fees and after accounting for payments or receipts for risk adjustment, risk corridors, and reinsurance under sections 18061, 18062, and 18063 of this title) for such plan year.

(ii)

Calculation based on average ratio

(2)

Consideration in setting percentages

(3)

Enforcement

(c)

Definitions

(d)

Adjustments

(e)

Standard hospital charges

(July 1, 1944, ch. 373, title XXVII, § 2718, as added and amended Pub. L. 111–148, title I, § 1001(5), title X, § 10101(f), Mar. 23, 2010, 124 Stat. 136, 885.)

cite as: 42 USC 300gg-18