You are here:HomeIssuesHealth Care Reform2012$1.3 Billion in Healthcare Rebate Checks to Go Out By August 1

$1.3 Billion in Healthcare Rebate Checks to Go Out By August 1

Health insurance companies in the United States will issue an estimated $1.3 billion in rebates by this August under the Patient Protection and Affordable Care Act’s medical-loss ratio (MLR) requirement, according to a new report released by the Kaiser Family Foundation based on the latest estimates provided by insurers to state insurance commissioners
May 22, 2012

Health insurance companies in the United States will issue an estimated $1.3 billion in rebates by this August under the Patient Protection and Affordable Care Act’s medical-loss ratio (MLR) requirement, according to a new report released by the Kaiser Family Foundation based on the latest estimates provided by insurers to state insurance commissioners. If health insurance carriers fail to meet MLR requirements, they are required to send out rebate checks.

The report said rebates will include $541 million in the large employer market, $377 million in the small business market and $426 million for those buying insurance on their own. Rebates in the group market will generally be provided to employers, and in some cases be passed on to employees as well, the foundation said. According to the foundation’s report, 31 percent of consumers in the individual market can expect to receive a rebate. Among employers, about one-quarter – 28 percent – of the small group market and 19 percent of the large group market are projected to receive rebates.

Consumers receiving rebates in the individual market are projected to receive $127 on average, with amounts varying significantly by insurer and state. The average rebates for individual purchasers expected to receive them range from just a few dollars in some states to as much as an average of $305 in Alaska, $294 in Maryland, $243 in Pennsylvania, $241 in Idaho, and $236 in Mississippi, the report said. The rebates, which the Obama campaign reportedly sees as a “stealth weapon” for improving opinion of the health law, will arrive no later than August 1 – three months before the presidential election. Time magazine posted a sample letter from the Department of Health and Human Services (HHS) that insurance companies will be required to send out.

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