Millions of Americans may receive rebates from insurers this year

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Insurance RefundsBefore the summer draws to a close, millions of people across the United States will be receiving rebates from their insurers, due to the new federal healthcare reform requirements that have placed strict rules on the way that insurance companies spend their earnings.

This regulation is not without opposition. The entire insurance industry, along with a large number of state officials, have been battling this rule for some time. Based on the federal regulations that went into effect at the end of 2011, health insurance companies are required to spend between 80 and 85 percent of the money they bring in through their premiums only on medical care. Should an insurer fail to comply, it is required to issue a customer refund.

Insurance companies have been voicing their concern that these new rules could hurt health plans nationwide, but customers are keen to receive the resulting rebates that will begin in 2012. According to many insurers, this rule will eliminate some health insurance plans from the marketplace.

Initial predictions have estimated that as many as 9 million people in the U.S. could receive rebates totaling as much as $1.4 billion. This would mean an average of approximately $160 per policyholder, though it is likely that the amounts will vary from one customer to the next.

It is expected that some insurance companies will follow the new rule and will therefore not have to issue a rebate to their customers. However, those that do not comply will have to provide the federal government with their plans for issuing rebates by June 2012.

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