Pennsylvanians to receive rebates totaling $51.6 million from health insurance companies [The Times-Tribune, Scranton, Pa.]

June 23--More than a half-million Pennsylvania residents will receive rebates totaling $51.6 million by August from their insurance providers for paying too much in administrative costs and not enough for medical care.

But few people covered by two local health insurance companies will be among those receiving a check, according to officials.

Part of the Affordable Care Act law, insurance companies nationwide that spend more than 20 percent on administrative costs and less than 80 percent on medical care and quality improvement must send customers a rebate.

In Pennsylvania, rebate checks will average $165 for the 312,000 families covered by an insurance policy, Centers for Medicare & Medicaid Services, part of the Department of Health and Human Services, announced this week. Insurance companies that don't meet the 80/20 threshold will send a rebate for the balance to policyholders no later than Aug. 1.

"The 80/20 rule helps ensure customers get fair value for their health care dollar," Health and Human Services Secretary Kathleen Sebelius said in a statement.

Anthony Matrisciano, spokesman for Blue Cross of Northeast Pennsylvania, said the insurance company will not pay any rebates for any individual or small group policyholders related to the 80/20 rule. But First Priority Life Company, an insurance company within Blue Cross NEPA, will issue rebates for its fully-insured large group insurance policies.

Mr. Matrisciano said "modest" rebates would be issued through employers using First Priority Life insurance products. For large group insurance policies, the law requires companies to spend 85 percent on medical care or quality improvement and 15 percent on administrative costs.

First Priority Life Company used 84.6 percent of premiums for medical care, missing the requirement by 0.4 percent.

"This represents less than seven percent of the companies we insure," said Mr. Matrisciano, who did not provide the specific number of people receiving rebates.

Blue Cross NEPA insures 545,000 people.

Lisa Hartman, marketing director of Geisinger Health Plan, the insurance arm of Geisinger Health System, said none of the 288,000 policyholders with the company will receive a rebate since "we are within the percentages in the regulations."

"It means that our pricing is appropriate," said Ms. Hartman.

Specific ratios of administrative costs to medical care paid through policyholders' premiums were not available since the number varies from individual and group insurance plans, Ms. Hartman said.

Insurance companies that meet this part of the health care law still must send policyholders letters informing them of the requirement.

All information related to the insurance ratio rule will be posted on HealthCare.gov later this summer.

Contact the writer: [email protected], @rwardTT on Twitter.

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