Consumers to receive $11 million in refunds in the coming months
Many Arizona residents are due to receive refunds from health insurance companies in the coming months. In compliance with federal law, some of the state’s insurance companies are returning $11 million to consumers. According to the Department of Health and Human Services, the average refund a family will receive is $51. Some 350,000 consumers throughout the state are expected to see refunds in the near future coming from their insurance providers.
Insurers are unable to comply with federal health care provisions
According to the Affordable Care Act, insurance companies must spend no less than 80% of the money they collect through premiums on improving health care and the services they provide to consumers. This is known as the “medical loss ratio” provision and is meant to ensure that insurers are paying attention to the needs of consumers and not focus solely on profits. Insurers that cannot comply with this provision must return the premiums they collected from policyholders.
Refunds will be issues in phases
Refunds will be issued in a variety of ways. Some consumers will receive credit on their insurance bills, which will significantly reduce the cost of their health insurance coverage for a time. Only those with small or large group policies are likely to receive refunds at this time. Refunds are expected to be issued in phases, with some consumers receiving their refunds early than others.
Insurers are finding success despite difficulties in complying with federal provisions
Blue Cross Blue Shield, Companion Life Insurance, Connecticut General Life Insurance, Golden Rule Insurance, and several other large insurers have failed to comply with the medical loss ratio provision of the Affordable Care Act. Despite this, many insurers have manage to set records in terms of profit this year thanks to savvy investments and the rapidly growing number of those purchasing insurance coverage for the first time. The medical loss ratio provision may continue to be a difficult issue that insurers have to deal with, but the industry will likely remain financial strong despite the provision.