Does your health insurer owe you?
Millions of people will be getting a rebate from their health insurers, unless the U.S. Supreme Court decides otherwise.
About 12.8 million Americans could receive rebates from their health insurance companies this summer -- $1.1 billion total, or an average of $151 per family. That's because health care reform limited how much insurance companies can charge for expenses that have nothing to do with your care -- like fat-cat pay for the company CEO.
Sounds great, but remember that all bets could be off depending on how the U.S. Supreme Court rules on the constitutionality of the Affordable Care Act later this week. (Post continues below.)
The Washington Post explains what the rebates are for:
That Affordable Care Act rule requires insurance companies to spend at least 80% of subscriber premiums on health care claims and quality improvement initiatives. The other 20% is left for administrative costs and profits.
Health insurance plans that don't hit that threshold will send a rebate to consumers to cover the difference.
In some states, the rebate could be a lot more. Says HealthCare.gov:
The states with average rebates above $500 per family are: Vermont ($807), Oregon ($777) and Indiana ($503) in the large group market; Georgia ($811), Ohio ($783), New York ($632), Alaska ($622), and Illinois ($551) in the small group market; and Mississippi ($651) and Alabama ($582) in the individual market.
If the rebates stand, expect to receive a credit or a check by Aug. 1 if you purchase your own insurance. Otherwise, the rebate goes to the employer who pays for your plan, and the boss can share it with you or spend it in a way that will improve your health care. (If I worked for a company that provided health care, I know I'd want my cut.)
Here's what residents of various states can expect if the rebates go out as planned:
- In Colorado, about 120,000 families will receive $27.5 million. The average rebate will be $227, says The Denver Post.
- The highest total amount for an individual state -- $167 million -- will go to 1.5 million Texans, says the Houston Chronicle. The average there is $187.
- The average rebate is $5 in North Dakota, where 4,229 consumers will benefit.
- In two states, no one will get a dime because all insurers met the requirements. They are New Mexico and Rhode Island.
You can find more details about the rebates in your state here.
People love getting money back, particularly if they've been overcharged. But there's another purpose for the rebates. Says Bankrate:
(Deborah) Chollet (of Mathematica Policy Research), who is helping states set up the new health exchanges, says the MLR program and its insurance rebates were designed to put the onus on insurers to find other profit streams, ideally by renegotiating with service providers to lower health care costs.
Are you looking forward to getting a check? Is the government right to require that health insurance companies not go overboard in spending for marketing, executive pay, and the like, and concentrate dollars on actual care?
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