Tuesday, May 15th, 2012
You may be getting a rebate check from your health insurance provider, courtesy of the Affordable Care Act, also called “Obamacare.” Odds of your being one of the rebate recipients are about one in four, maybe a little better. The average amount of the rebate is around $76, although a very few will be as high as $500. Some of those checks already are in the mail.
The ACA provides that health insurance companies must spend at least 80 percent of the premiums they receive on medical care. And for large group plans, that’s 85 percent. If they fail, they must rebate the difference back to policy holders. The Kaiser Family Foundation estimates that “consumers and businesses are expected to receive an estimated $1.3 billion by this August.”
The insurance industry grumbles that the rebate requirement is likely to increase their costs and cause an increase in premiums. The Kaiser Foundation says that’s nonsense. It’s more likely to cause insurers to think twice before asking for a premium hike. In fact, it may already have saved you some money.
“The presence of these thresholds and the corresponding rebate requirement have provided an incentive for insurers to seek lower premium increases than they would have otherwise,” a Kaiser report says. “This ’sentinel’ effect on premiums has likely produced more savings for consumers and employers than the rebates themselves.”
Keeping health insurance affordable is a huge problem in the United States. Insurance costs are draining businesses and probably contributing to unemployment. It’s also a problem for individuals, especially those with devastating health problems such as mesothelioma.
The political world is buzzing because the Obama Administration insists that insurance companies inform customers why they are getting rebates. The checks must be accompanies by a letter saying the rebates are required by the Affordable Care Act.
The Administration may be frustrated by the fact that polls show the ACA remains unpopular. However, when polled about individual provisions of the law, people say they are in favor of most of them.
For example, pols show most people agree that insurance companies should spend more of the money they receive in premiums on health care than on administration and marketing. They agree that people should not be denied coverage because of a pre-existing condition. They want the government to help poor people get health care.
Many people are confused about what’s in “Obamacare.” That’s partly because the law’s many parts are going into effect at different times. This is the first round of rebate checks, for example. A lot of the major provisions are scheduled to go into effect in 2014.
The Administration hopes that people will like the law once they see that it really will benefit them or someone they know. And that’s why they want to know that the rebate checks are a result of the ACA.