John Boehner: Repeal THIS. Email Print

Rebate checks to subscribers from insurers

On Wednesday, the House of Representatives stages a dramatic – and pointless – spectacle to vote to repeal the Affordable Care Act.  aka Obamacare.

For the GOP reps, the grounds they've claimed for reversing the law is to hold off costs for patients and keep the feds out of all things health and insurance related. Medicare excepted.

But what if a true repeal actually stopped your insurance carrier from sending a check in the mail to you? Not a future, theoretical check but an immediate, summer/2012 (due August 1) rebate.

For some Americans who hold individual policies, insurance carriers are rebating to 4 million of their subscribers excess premium collected, $390 million worth, required to be refunded Aug. 1.  Across 44 states, the average family refund, if your insurer overbilled, is $152 (sorry Arkansas, Iowa, New Hampshire, New Mexico, Rhode Island, Vermont - at least in the initial published list, your carriers were efficient enough that your states are out of the running).

There's wide variation across states:  $240 on average for 300,000 subscribers in FLA, $193 for 24,000 in LA, $205 for 99,000 in Michigan, $139 for 181,000 in Missouri, $651 for 15,000 in Mississippi, $203 for 16,000 in Montana, $218 for 26,000 in NC, $267 for 30,000 in Nebraska, $106 for 130,000 in Oklahoma, $360 for 13,000 in OR, $238 for 133,000 in PA, $227 for 105,000 in SC, $356 for 657,000 in TX -- a whopping $134 million for the state of Texas alone.  Also $383 for 10,000 in WV, and $356 for 5,000 in Wyoming.

Here's the full list, at left in blue. Beyond the individual market, employer plans for the large-firm market (at right), and small-employer plan market (center) are in store to receive refunds if their insurer overcharged, and the refunds to be allocated by ratio to the enrollees' (employees') benefit, according to the cost-sharing formula for premiums.

The rebates are due from carriers whose spending for their overhead (marketing, bonuses, non-claims payments) swallowed up more than 20% of premiums paid. It's the 80/20 rule, or "medical-loss ratio" provision of the health reform law that forces insurers to return the premium payment. In the market for larger employers the claims spending ratio has to be 85/15. The disgorgement of the excess premium is to combat overcharging subscribers for marketing, etc. unrelated to medical expense.


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