A brief update on the Health
Insurance rebate that the Wrongologist wrote
about in March.
You may remember the salient facts:
- The
Affordable Care Act requires that 80 to 85 cents of every dollar insurers
collect in premiums be spent on medical care or activities that improve the
quality of that care (the Medical Loss
Ratio, or MLR)
- If
not, they must send their customers a rebate for the difference
- However,
An insurer-supported Senate bill introduced by Mary Landrieu (D-LA) aimed to
roll back the rebates
Here is the update:
Landrieu’s bill failed
to make it to the floor of the Senate.
As a result, this
year, 15 million
people will receive checks from their health insurance companies totaling $1.3
Billion.
The ACA reform
requires that insurance companies spend most of the premium dollars paid by
individuals on providing health care services, or refund the difference to
policy holders. This is a significant part of what health reform was about.
The
Obamacare haters like to talk about “market-based” solutions for
health reform. Well, this is one they will try to spin as a bad idea.
Based
on the preliminary estimates from insurers, the rebates will be distributed
among the 3 insurance markets as follows: $426 million in the individual
market, $377 million in the small group market, and $541 million in the large
group market. In the small group market, rebates will be issued for nearly 5
million enrollees, and in the large group market, 7.5 million.
In
the individual market, (these are the
people who buy their insurance individually) this translates to an
average rebate of $127 that will go to 3.4 million people. So, nearly a third of the people in the individual
market will get a check from their insurance company, with
consumers in Texas (92%), Oklahoma (86%), South Carolina (84%), and Arizona
(83%) most likely to be eligible based on insurer estimates.
With all this good news, the insurance industry has weighed
in, continuing to spread the message of doom about the ACA and the MLR rebate. Robert Zirkelbach, spokesperson for
America’s Health Insurance Plans, said:
“Given the inherently
unpredictable nature of health care costs, it is not surprising that some
health plans expect to pay rebates to consumers in certain markets…However, the
coverage disruptions and other unintended consequences of imposing a new arbitrary
federal cap on health plan administrative costs are likely to outweigh any
benefit these rebates will provide to consumers.”
OK, more spin from
the plutocrats about uncertainty, future coverage disruptions and cost
increases. As we said here,
is the industry threatening increases above the 25%-35% we have experienced
lately?
Let’s hope that the
Supreme Court sees the news on the rebates. Will they thumb their collective
noses at 15 million people by invalidating the ACA?
