Insurers sending out rebate checks [Star Tribune, Minneapolis]
By Jackie Crosby, Star Tribune, Minneapolis | |
McClatchy-Tribune Information Services |
The new rules, part of the federal health care overhaul that recently survived a
In
Studies have suggested that insurers are in fact spending a higher percentage of premiums on patient care than in the past, or the payouts would have been noticeably larger.
U.S. Sen.
The bulk of the rebates in
"It's difficult to predict health care costs and utilization,"
Fewer
For most people, the checks won't make a dent in the household budget. The average
There are some outliers, however:
The difference between meeting and not meeting the standard "can literally be a few large claims,"
Most consumers are insured by companies that meet or exceed the standard, according to data from the
Some insurers meet goals
About 62 percent of consumers are covered by individual plans that meet or exceed the standard. That compares with about 83 percent of people covered by small group plans and 89 percent of those in large company plans, which have 51 or more employees. Large corporations that are self-insured are not covered by the law.
Known informally as the "80/20 rule," the provision requires insurers to spend at least
As a result, insurers are paying much less in rebates under the federal law in
Some individual insurance customers will receive checks or see lump-sum reimbursements returned to debit or credit card accounts. The majority will go to employers, who have some leeway applying the rebates to reduce future health care costs through premiums or other methods.
While everyone likes an unexpected check in the mail, benefits consultant
"Employers are going to have to decide on an equitable way to distribute it," he said. "What about people who no longer work for the company? They're the ones who overcontributed. It'll be interesting to see how it shakes out in the retail or restaurant industry where there's a lot of turnover."
Effect on premiums
While insurers weren't required to pay rebates last year, they did have to file reports with the federal government. The
In
"In a number of places this has brought down health care premiums and in some cases they haven't gone up when otherwise they would have," he said. "The insurance companies looked at what happened last year and adjusted accordingly."
They're much less willing to set an "irrational price" to grab market share because they no longer can bank the reserves to cover it.
"We're seeing much more disciplined pricing than we'd normally see at this stage," he said.
"It's not chump change," Heupel said, but companies like United have figured out how to incorporate this and other elements of reform and "still manage to produce nice returns for shareholders."
"It isn't as dire as we all thought it could have been," Heupel said.
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