Rebates on health insurance as new laws take hold across US

Health insurance policy holders in the US have begun receiving rebates on their policies as part of the federal health care law or Obamacare.

The law requires insurers to give out annual rebates by Aug. 1, starting this year, if less than 80 percent of the premium dollars they collect go toward medical care.

As a result, insurers will pay out $1.1 billion this year, according to the Department of Health and Human Services, with an average rebate of $151 per household. The highest average amounts are going to people in Vermont ($807 per family), Alaska ($622) and Alabama ($518). In some states such as New Mexico or Rhode Island, no rebates will be offered because all the insurers in those states met the 80/20 requirement.

Although the percentage of insurance companies that owe rebates this year is relatively small, about 14 percent, many giants of the industry are on the list. They include Aetna, Cigna, Humana and UnitedHealthCare.

This being election year in the US, President Obama is highlighting the rebates as a tangible early benefit of the controversial legislation; on the day the Supreme Court upheld the law as constitutional last month, he said millions of Americans would see rebates because their insurance companies had “spent too much on things like administrative costs and C.E.O. bonuses, and not enough on your health care.”

But not everybody will be in luck when it comes to those juicy rebates.

Self-insured employers, which cover more than half the nation’s workers, are exempt from the new rule, as are Medicare (health care for those over 65 years of age) and Medicaid (health care for low-income families). That said, the new rules will benefit approximately 12.8 million people in the US. Many who buy coverage directly from insurers(including self-employed people) are receiving checks. But in most cases rebates are being sent to employers, who can choose to put them toward future premium costs instead of distributing them to workers.

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