Health Insurance and Rebate Checks

Respectfully Submitted by Lawrence Rafferty (rafflaw)-Guest Blogger

I have to admit that I was not aware that the Affordable Care Act, or Obamacare, as its detractors call it, mandates that the insurance companies who don’t spend at least 80% of premium money on actual medical care expenses, must send rebates to policy holders.  “But the rebate provision of the law — the fruits of the so-called “80/20 rule” — is about to kick in big time, as millions of Americans receive rebate checks or premium reductions from insurance companies who have failed to spend enough on patient care. This cash could be a true game changer in public attitudes about whether the law actually is beneficial and good public policy. The rebate provision of the law has been known and discussed in health care policy circles for months, but has largely flown below the radar in the political world and for voters—until now.”  Time  

These rebates or premium reductions could not only be a big financial benefit to millions of policy holders, it could also be a big political boost for the Obama Administration in its attempts to convince the public of the many benefits provided by the Affordable Care Act (ACA).  Now that I know that the ACA will provide these rebates, just how much money are we talking about?  The Time Magazine article linked above quotes a Kaiser Family Foundation study that suggests that big dollars are involved here.  “This analysis looks at the latest estimates provided by insurers to state insurance commissioners.The analysis finds that consumers and businesses are expected to receive an estimated $1.3 billion by this August in rebates from health insurers who spent more on administrative expenses and profits than allowed by the ACA. The rebates include $541 million in the large employer market, $377 million in the small business market, and $426 million for those buying insurance on their own. Rebates in the group market will generally be provided to employers, and in some cases be passed on to employees as well.Rebates are expected to go to almost one-third (31%) of consumers in the individual market. Among employers, about one-quarter (28%) of the small group market and 19% of the large group market is projected to receive rebates. The share of consumers in the individual insurance market expected to receive rebates ranges from near zero in several states to as high as 86% in Oklahoma and 92% in Texas. “ KFF

$1.3 Billion dollars is a significant amount that will be soon heading to the pockets of millions of policy holders.  I was especially interested in the states like Texas and Oklahoma where almost every policy holder in the respective states will be receiving a rebate.  Would it be a fair question to ask what are Texas and Oklahoma not doing to protect its citizens from insurance companies who may be pocketing more money and providing less care per health care dollar?

The ACA is a complicated law and it wasn’t the single payer plan that I was hoping and working for, but it has already helped millions by mandating that children can stay on Mom and Dad’s policies longer and by protecting patients from being denied coverage for pre-existing health issues.  Now that the 80/20 rule rebates are about to kick in, millions more people will feel a real benefit in their pocketbooks thanks to the ACA.  Now, if we can just get the Supreme Court to forget its partisan ways, maybe all of us can begin to benefit from the Affordable Care Act. What do you think of the Affordable Care Act and the 80/20 requirement?  Will the rebate checks and premium reductions mandated by the bill have an impact on people’s lives and their opinions of the Act?  If you have time on this beautiful Mother’s Day, let us know what you think.  By the way, Happy Mothers Day!

Additional source:  Raw Story

Link to the full Act:  Health Care.Gov

59 thoughts on “Health Insurance and Rebate Checks”

  1. rafflaw:

    It is too bad insurance companies did not do this all along for people who were good stewards of the health care money.

    But this wont last long. I used to get rebate checks for my professional liability policy but it didnt last but a few years and the companies did away with it.

  2. When it comes to affordable national health care, socialism works as well as or better than for-profit-and-bonus capitalism. It most certainly does here in Taiwan where my wife and I pay a mandated premium payment of $40 per month. When it comes to affordable national health care, for-profit-and-bonus “capitalism” constitutes a dirty word, and deservedly so in the case of the Usual Suspect, America..For-profit-and-bonus ideologues can go pound sand — preferably in Afghanistan, Yemen, Somalia, Pakistan and Israel where Americans prefer to squander resources that would more than assure them a viable, single-payer, Medicare-for-all “socialism.”

    American for-profit-and-bonus ideologues simply love them some socialism when it means tax-cuts, subsidies, and bailouts for themselves. They just hate the very thought, however, that the working class might in some small way get in on the socialism, too. Advanced countries provide universal education, health care, and retirement to the citizenry in their own enlightened self-interest. Advanced countries usually can do this because they don’t squander their national resources on a bloated and wildly unnecessary military establishment that keeps picking fights with impoverished nobodies only to lose time and again.

  3. Report: Rebates From Health Care Law Will Top $1B
    by The Associated Press
    WASHINGTON April 26, 2012
    http://www.npr.org/templates/story/story.php?storyId=151464634

    Excerpt:
    WASHINGTON (AP) — More than 3 million health insurance policyholders and thousands of employers will share $1.3 billion in rebates this year, thanks to President Barack Obama’s health care law, a nonpartisan research group said Thursday.

    The rebates should average $127 for the people who get them, and Democrats are hoping they’ll send an election-year message that Obama’s much-criticized health care overhaul is starting to pay dividends for consumers. Critics of the law call that wishful thinking.

    The law requires insurance companies to spend at least 80 percent of the premiums they collect on medical care and quality improvement or return the difference to consumers and employers. Although many large employer plans already meet that standard, it’s the first time the government has imposed such a requirement on the entire health insurance industry.

    “This is one of the most tangible benefits of the health reform law that consumers will have seen to date,” said Larry Levitt, an expert on private insurance with the Kaiser Family Foundation, which analyzed industry filings with state health insurance commissioners to produce its report. Kaiser is a nonpartisan information clearinghouse on the nation’s health care system.

    Still, health insurance is expensive, and $127 may not even pay a month’s worth of premiums for single coverage.

    And the insurance industry says consumers should take little comfort from the rebates because premiums are likely to go up overall as a result of new benefits and other requirements of the law.

    “The net of all the requirements will be an increase in costs for consumers,” said Robert Zirkelbach, spokesman for America’s Health Insurance Plans, the main industry trade group.

    “Given that health care costs are inherently unpredictable, it’s not surprising that some plans will be paying rebates to policyholders in certain markets,” Zirkelbach added.

    But the Kaiser report said the rebate requirement may be acting as a brake on the industry, discouraging insurers from seeking big premium increases to avoid having to issue refunds later and face possible criticism.

    The new law has “provided an incentive for insurers to seek lower premium increases than they would have otherwise,” the report said. “This ‘sentinel’ effect on premiums has likely produced more savings for consumers and employers than the rebates themselves.”

    The study found the largest rebates will go to consumers and employers in Texas ($186 million) and Florida ($149 million), where Govs. Rick Perry and Rick Scott have been among the staunchest opponents of the federal law. Both states applied for waivers from the 80 percent requirement and were turned down. Hawaii is the only state in which insurers are not expected to issue a rebate.

  4. CLH, insurance is socialized.
    Many years ago I had a lot of surgeries, Definitely cost in the high 700,000 if not millions of dollars. Everyday I silently thanked all the others who were paying their BC/BS and were well. I have not needed medical care for years and know that the payments I give BC/BS pays for those who are currently unwell.
    Re Calling it Obamacare, my understanding is that the Pres says let’s call it that also. Change it from being used as a pejurative.
    I just wish the pres and his folk would get out there, each and everytime there is a benefit of this (or other successes of his admin) and tout their own horns so the country knows the truth, as opposed to just those loud elephant cries that are lies.

  5. My local BC/BS has poured $60 million into a no go Medical College built in Scranton, PA. The School after three years has not received accreditadition for its students because of a lack of fund raising plus other major concerns.
    As a payer into BC/BS to go with my medicare I take umbrage with these payment. My payments go toward medical care for my wife and myself if needed not a Medical School that never should have been built. Maybe just maybe BC/BS might have gone over the limit. Forgot to mention their President is on the board of this so called Medical School.

  6. As good an idea as this is, one can only wonder at what “creative accounting” measures will now be developed to screw the insured out of their rebates.

  7. This is not on thread, cuz my info is scanty.

    But must complain that the (R)s are better at naming than Obama boys. How about American Health Care. Paint it with a broad brush and R/W/B colors. Just because they do does not mean we should not. Obamacare existed as a concept long before he did. But every bit helps.

  8. mahtso 1, May 13, 2012 at 1:47 pm

    “the Affordable Care Act, or Obamacare, as its detractors call it”
    I’ve read that the President also refers to it as Obamacare. Whether that is true, I don’t know.
    ================================
    Those who experience its benefits call it “our care.”

    Our struggle is to convert Their-Topia into Our-Topia, because Utopia does not exist.

  9. I agree with Dredd, great find Raff.

    At my company the employee’s health insurance in completely paid for, and those with families have to pay extra. I assume that the company will get the rebate for employees and employees with families will be getting the rebates.

    A prime topic of coffee machine talk at work tomorrow.

  10. See now….It hats the problem cutting into the top 1% income…… If they keep the money the get bonuses….. Unlike the banks….. Their bonuses were mostly taxpayer funded……

  11. Crunruh,
    Some companies have already done so. The deadline is the law until the Supremes tell us otherwise, so they will have to comply.

  12. CLH, Requiring people to buy from a profit making corporation is socialism? It seems to me more like capitalism gone amok. As long as the plan requires people to buy the insurance, it’s only fair that profit be limited. And, yes, insurance corporations will continue (not start) to raise rates. That’s what they do, especially when they have a captive customer set.

  13. Ah, yes. Vote buying at it’s finest. Never mind that the corporations who provide health insurance are doing so to make money. Never mind that the ones who utilize health care typically use it far in excess of their premiums. So let’s redistribute the wealth. I love it when liberals openly proclaim socialism; if that’s you’re stance, own up to it. Now watch as more companies decide to raise their premiums sky high, to widen the margins, so that the 20 percent they are allowed to keep goes higher. Brilliant plan.

  14. But will any insurance company send out checks or even publicize their calculations until the Court rules? With a reasonable likelihood of a full repeal, it would be the fiduciary responsibility to the stockholders to not send out checks until the legal requirement to do so is confirmed .

  15. “the Affordable Care Act, or Obamacare, as its detractors call it”
    I’ve read that the President also refers to it as Obamacare. Whether that is true, I don’t know.

    “These rebates or premium reductions could not only be a big financial benefit to millions of policy holders, it could also be a big political boost for the Obama Administration in its attempts to convince the public of the many benefits provided by the Affordable Care Act (ACA).”

    That boost will be enhanced by the federal requirement that the rebate be accompanied by a statement that it is due to the Affordable Care Act. (Unless people don’t understand that that is the technical name for Obamacare.)

  16. Not much help to the 50 million who don’t have healthcare or receive it from the govt, but at least it holds healthcos somewhat accountable. The breakdown should be 85/15……..

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