Rebates spurred by Affordable Care Act
The Kaiser Family Foundation has released a new report that shows U.S. consumers can expect to see large rebates from health insurance companies. These rebates come courtesy of the federal Affordable Care Act. One of the law’s provisions, known as medical loss ratio, requires insurers to pay no less than 80% of the money they collect from premiums on improving medical care. If companies cannot meet this standard, they must return this money to policyholders. The Kaiser report notes that those receiving health insurance through their jobs can expect to receive rebates this year.
Consumers expected to receive rebates through employers
According to the report, the majority of this year’s rebates will go to consumers who obtain coverage through their employer. These rebates are expected to be more than $1 billion. Rebates will be between $10 and $500 for each policyholder, depending on the type of health insurance plan they have. The amount returned to consumers will also depend on how much money was spent by insurance companies to improve medical care. On average, the report suggests that 31% of consumers will receive rebates of $127.
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Rebates to be issued as checks or credit for future bills
These rebates can be issued as checks to consumers by their insurance companies. These companies can also apply the value of these rebates to future bills, meaning that policyholders will have less to pay in the future. The Kaiser report warns that some employers are dubious concerning the issuing of these rebates. The report claims that a significant portion of employers take these rebates for themselves instead of passing the funds on to employees.
Some workers may miss out on rebates because of government exemptions
Not all consumers can expect to see rebates coming their way. The federal government has provided some states, such as Georgia, Iowa and Nevada, with waivers that make them exempt from complying with the medical loss ratio provision. Health insurance companies in these states will not be required to meet the standards imposed by the law, thus policyholders are unlikely to receive rebates. Those with policies from large insurance companies may not see rebates as well, as these companies are able to meet the medical loss ratio standards more easily than others.