Blog | Wednesday, April 11, 2012

QD: News Every Day--Consumers would have reaped health insurance rebates sooner, report says

Consumers nationwide would have received an estimated $2 billion in rebates from health insurers if the new medical loss ratio rules enacted as part of the Affordable Care Act had been in effect in 2010, according to The Commonwealth Fund.

The rule aims to control private insurance costs for consumers and government by requiring a minimum percentage of premium dollars to be spent on medical care and health care quality improvement, as opposed to administrative costs and corporate profits. Insurers must meet a minimum of 80% in the individual and small-group markets, and 85% in the large group market, and issue rebates if they do not.

Almost $1 billion in rebates would have been issued to about 5.3 million people who receive coverage through the individual market, or 53% of all those with individual coverage nationwide, if the rule had been in effect a year earlier, in 2010, The Commonwealth Fund said in its press release. Another $1 billion would have gone to about 10 million people with policies in the small- and large-group markets. About 23% of privately insured consumers in all markets would have received rebates.

The estimates offer a prediction of what consumers may expect to see in August of this year when insurers are required to issue rebates to 2011 policy holders if the insurers do not meet the new thresholds, the organization said.