The week before the U.S. Supreme Court upheld most of the Affordable Care Act, the federal government announced that 12.8 million Americans would receive rebates on their health insurance premiums at an average of $151 per household.

Those checks are now in the mail or in the hands of those who paid the premiums, who, in most cases, are the employees of companies that have health insurance through a commercial plan. In Missouri, some $65 million in rebates due by Aug. 1 will be shared among 588,000 private health insurance customers.

The rebates were triggered by the "medical loss ratio" provision of the 2010 health care reform law that essentially caps insurance companies' administrative costs at 20 percent of premiums.

Most employees with health insurance, however, will not see a rebate because companies that are self-insured -- those that offer their own plans that are simply administered by an insurance company -- are exempt from the rebate provision. Even employees covered under a commercial plan might not get a cut of the refunded premiums because the rebates are sent directly to employers, who can decide whether to return a percentage to the employee or apply the rebate to the coming year's premiums.

The group most likely to get a rebate is the 2.6 million Americans who pay their own insurance, just a fraction of the insurance consumer pool.

And just because rebates are made this year doesn't mean premiums will be lower next year.

"Premium rates continue to reflect the rise in health care costs," said Kevin Shermach, director of public relations for United Healthcare's central region.

Shermach said premiums will likely rise in 2013 because of the new fees, surcharges and other requirements of the Affordable Care Act.

Shermach said United Healthcare's average rebate payment, when spread across the company's entire commercially insured population in Missouri, will be about $63.50 per person.

Meanwhile, the formulas for determining rebates and the definition of insurance company activities that qualify as payment of direct health care costs are complex, just like the voluminous health care reform law that will be the focus of continued public and legislative debate.

"There are so many moving parts and so many of them that we don't understand," said Mark Farnen, co-owner of Strategists LLC, a small business in Columbia. Farnen received a rebate from Anthem, but he said he still has questions about how that will affect future premiums and the future cost of health care.

Business owners can apply rebates to future premiums or return to employees according to the percentage of the premium the employee paid. Farnen said his company's refund will be applied to the cost of health insurance premiums for covered employees for the coming year.

Farnen calls the Affordable Care Act "a movement in the right direction" for the nation's health care system, but he's still mystified about how health care costs are determined.

"I do think it's important to know the real cost of providing care," he said. "You need to fix it from that end. If the real cost is reasonable, then that should be reflected on your premiums."

Reach Jodie Jackson Jr. at 573-815-1713 or e-mail jjackson@columbiatribune.com.

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This article was published on page A10 of the Thursday, July 12, 2012 edition of The Columbia Daily Tribune. Click here to Subscribe.