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Health insurers will refund $5.2M to Pa. subscribers, group plans

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Thursday, July 24, 2014, 12:01 a.m.
 

Health insurers in Pennsylvania will refund about $5.2 million to individual subscribers and group plans because they spent too much on administration, such as salaries and profits, the Obama administration said Wednesday.

Insurance carriers across the country will give back $330 million this year because they violated a provision of the Affordable Care Act that requires companies to spend at least 80 percent of premiums on patient care, according to the Department of Health and Human Services.

“Standards like these created under the health care law are providing Pennsylvanians with immediate savings and are helping to keep costs down over the long-term,” HHS Secretary Sylvia Burwell said in a statement.

Eleven insurers selling plans in Pennsylvania were required to provide refunds, including Aetna Inc. and Golden Rule Insurance Co., which is owned by United Healthcare. Both spent too much on administration of individual policies last year, with Aetna refunding $825,000 and Golden Rule giving back $1.7 million.

Officials with both companies could not be reached for comment.

The largest health insurers in Western Pennsylvania, Highmark Inc. and UPMC Health Plan, were not required to refund premiums.

In Pennsylvania, the average refund is $75 a family; nationwide the average is $80.

Insurers last year paid $500 million in rebates to employers and individuals, or about $100 a family.

The provision, known as the Medical Loss Ratio, was first applied in full in 2011. Companies are required to provide the 2013 refunds by Aug. 1 in one of the following ways: by check, reimbursement to the account used to pay the premium, or a rebate on future premiums.

Alex Nixon is a staff writer for Trib Total Media. He can be reached at 412-320-7928 or anixon@tribweb.com.

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