Health insurance rebates on the way

Average rebate per family is $173

Nearly 600,000 Missourians soon will receive more than $60.5 million in rebates from their health insurance companies through a provision in the Affordable Care Act that holds insurance companies accountable for how much of premium dollars they spend on health care.

The U.S. Department of Health and Human Services (HHS) announced last week that because of the provision — the Affordable Care Act’s Medical Loss Ratio, also known as the “80/20 rule” — insurance companies are operating more efficiently.

This year’s nationwide rebate is $500 million compared to more than $1 billion last year. The average rebate per Missouri family is $173.

The data comes from a Center for Medicare and Medicaid Services 2012 health insurer data report.

According to HHS, the “80/20 rule” requires insurers to spend at least 80 cents of every premium dollar on patient care and quality improvement. If this doesn’t happen, the companies owe rebates to customers.

“The health care law is providing consumers value for their premium dollars and ensuring the money they pay every month to insurance companies goes toward patient care,” said Kathleen Sebelius, HHS secretary. “Thanks to the law, 8.5 million Americans will receive $500 million back in their pockets and purses.”

Consumers will receive a notice from their insurance company regarding how much of a rebate, if any, a consumer will receive. The rebate must be paid by Aug. 1 and may be paid as a check in the mail, as a reimbursement on the same account used to pay the premium, or as a reduction in future premiums. An employer may also provide a rebate in one of these ways, or in another manner, such as more generous benefits.

As of June 4, 13 Missouri insurers owed health insurance rebates to Missourians.

In the individual market in Missouri, Golden Rule Insurance Company owed the largest amount in rebates, totaling $2,437,934.

The individual market is the market people turn to for health insurance when they don’t qualify for insurance under a group plan, Medicare or Medicaid.

In the state’s small group market, Healthy Alliance Life Insurance Company owed the largest amount, totaling $4,174,158 in rebates.

The small group market of insurers sells health plans to businesses with 100 or fewer employees.

In Missouri’s large group market, UnitedHealthcare Insurance Company owed the most, $3,662,637 in rebates.

The large group market refers to health plans offered by employers with more than 100 employees.

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