Consumers to receive $8.9 million in rebates this summer
Minnesota health insurance consumers are expected to receive some $8.9 million in rebates this summer, according to state officials. Senator Al Franken held a press conference on August 6 to provide information on the rebates and why they were significantly lower than what Minnesota health insurance companies had anticipated. Earlier this year, insurers predicted that consumers would receive some $14.6 million in rebates due to the medical loss ratio provision of the Affordable Care Act.
Minnesota health insurance companies may have missed the mark in their rebate predictions
The medical loss ratio provision requires health insurance companies to spend no less than 80% of the money they collect through premiums on medical care. Those that do not comply with this standard are required to return the money to policyholders. Minnesota health insurance companies appear to have exaggerated their predictions somewhat. This may be due to a law that has existed in the state since 1993.
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Old law mitigates financial impact of rebates
This week, Senator Franken brought attention to a longstanding law which imposes limits on health insurance rates. The law does not require insurers to provide rebates to consumers in return for placing strict limitations on their ability to make rate increases. Minnesota health insurance companies will still have to issue rebates as part of the federal law, but these rebates are likely to be much lower than what they would be if the state law did not exist.
Health insurance rebates issued on August 1
Health insurance rebates have been issued on August 1. Last month, some 123,000 residents received rebates from their health insurance company. The latest round of rebates will come in the form of checks or credit that can be used toward the payment of future premiums. The average rebate Minnesota residents can expect to see ranges from $73 per member and $160 per household. The Minnesota Department of Commerce will oversee the issuance of health insurance rebates and collect information concerning the funds and where they are going.