A new analysis by the Kaiser Family Foundation says that the Affordable Care Act’s Medical Loss Ratio saved health insurance consumers in the individual market approximately $2.1 billion last year, the majority of it in lower premiums. The MLR portion of ACA caps insurers’ profits and administrative costs by mandating that they issue rebates if they fail to dedicate a certain proportion of premium dollars strictly to health care and quality improvement.

The Kaiser analysis, penned by Cynthia Cox, Gary Claxton and Larry Levitt, says that if MLR had not been in effect, premiums for individual health insurance would have been $1.9 billion higher in 2012. The provision was implemented in 2011.

“The majority of plans sold to small and large businesses were already in compliance with their respective MLR thresholds before the law went into effect,” the report reads, “and our analysis shows that traditional MLRs (claims divided by premiums) for group plans have stayed relatively flat over the past three years.”

Insurers estimate that they will pay out an additional $241 million in rebates to individual market consumers based on their performance in 2012.

“Perhaps ironically,” the Kaiser trio writes, “when the MLR provision is working as intended and insurers set premiums to meet the thresholds, consumers save money but are less likely to get a check in the mail as tangible demonstration of those savings.”

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