Over $1 Billion In Consumer Insurance Rebates Coming Soon
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Today the Kaiser Family Foundation, a non-partisan group that covers health care issues, released a new report summarizing national and state level data of estimated insurance refunds coming soon for millions of Americans.
The report shows that insurers will owe an estimated $1.3 billion in rebates by August 1, 2012 because insurers failed to spend 80% of premiums on actual health care for people purchasing policies on their own and small businesses, or 85% for large employers.
We’ve been digging into this same data to see how major state insurers are reacting to the new law enacted as part of the Affordable Care Act, better known as “Obamacare”. We found that insurers are preparing for millions in rebates and in some cases low value carriers have made major improvements in how they spend consumer premiums. Here are a just a few key examples:
Blue Cross Blue Shield of Arizona, the state’s largest insurer, foresees rebates of $3.2 million to small business customers and $8.7 million to individual policyholders.
The small businesses inFloridacovered by Blue Cross Blue Shield of Florida can expect an estimated $44.9 million in rebates.
Nationally, United Healthcare’s Golden Rule Insurance Company spent more than 35 percent of individual policyholder premiums on administrative costs and profits in 2010. But due to the new rule they’ve improved that figure to just over 21 percent in 2011.
Bills currently pending in Congress would alter the medical loss ratio formula causing a loss of an estimated $900 million in consumer rebates. We’ve opposed these bills as a bad deal for consumers and a giveaway to insurance companies.
