Insurers to pay half as much in rebates this year
U.S. insurers will pay $500 million in rebates to employers and individuals this summer because of President Obama's health care law, about half the amount they paid last year.
The Affordable Care Act requires companies to refund customers when they spend less than 80 percent of premiums they collect on medical care.
The Department of Health and Human Services attributed the decline in rebates to insurers' adhering more to this requirement and to lowering premium rates for their products.
The government agency said Thursday that 8.5 million insurance customers would receive an average rebate of about $100 per family after August 1. For 2011, 4.1 million people received about $152 per family.
The law goes into full effect on Jan. 1, 2014, when an expansion of the Medicaid health plan for the poor and subsidized state health exchanges take hold. In recent weeks, states have begun publishing premiums for new insurance products for those exchanges.
The Medical Loss Ratio, or MLR, portion of the law was first applied in full in 2011 and limits spending on administrative costs, salaries and bonuses.
Gary Cohen, deputy administrator at the Centers for Medicare and Medicaid Services, said insurers were paying fewer rebates in 2012 than in 2011 because they were more strictly following the law and charging lower premiums.
The centers also said the MLR rule, a new review process that requires rate increases of more than 10 percent to be reviewed, and competition contributed to a savings of $3.4 billion among 77.8 million people because of lower spending on premiums last year.
Cohen said other market forces could be contributing to the lower premiums. Growth in health care spending has slowed during recent years as consumers have cut back on doctors' services, and the trend is forecast to continue.
Show commenting policy
TribLive commenting policy
You are solely responsible for your comments and by using TribLive.com you agree to our Terms of Service.
We moderate comments. Our goal is to provide substantive commentary for a general readership. By screening submissions, we provide a space where readers can share intelligent and informed commentary that enhances the quality of our news and information.
While most comments will be posted if they are on-topic and not abusive, moderating decisions are subjective. We will make them as carefully and consistently as we can. Because of the volume of reader comments, we cannot review individual moderation decisions with readers.
We value thoughtful comments representing a range of views that make their point quickly and politely. We make an effort to protect discussions from repeated comments either by the same reader or different readers.
We follow the same standards for taste as the daily newspaper. A few things we won't tolerate: personal attacks, obscenity, vulgarity, profanity (including expletives and letters followed by dashes), commercial promotion, impersonations, incoherence, proselytizing and SHOUTING. Don't include URLs to Web sites.
We do not edit comments. They are either approved or deleted. We reserve the right to edit a comment that is quoted or excerpted in an article. In this case, we may fix spelling and punctuation.
We welcome strong opinions and criticism of our work, but we don't want comments to become bogged down with discussions of our policies and we will moderate accordingly.
We appreciate it when readers and people quoted in articles or blog posts point out errors of fact or emphasis and will investigate all assertions. But these suggestions should be sent via e-mail. To avoid distracting other readers, we won't publish comments that suggest a correction. Instead, corrections will be made in a blog post or in an article.
- Faulty air bags in 30M vehicles
- Aesynt CEO gets technology council honors
- Mortgage rate slide’s impact could be minimal
- Stocks rise broadly on earnings; Amazon sinks