The Health & Healthcare Blog  

Tuesday, July 3, 2012

Health Insurance Rebates of $1.1 Billion Expected From New Health Care Reform Law

U.S. Department of Health & Human Services
Under the Affordable Care Act, the new U.S. health care reform law, health insurance companies are expected to send rebates of approximately $1.1 billion to 12.8 million Americans.

Health insurance organizations are required by the Affordable Care Act to reveal how much of consumer's premiums are in fact spent on health care. If the amount falls below 80% of the premiums customers pay for their medical insurance, the insurance companies must refund the difference.

Typically, insurance company costs include administration, wages and marketing, in addition to health care expenses. The rebate requirement of the new law intends to make them more accountable for their spending, giving consumers a square deal for what they pay in health insurance. Prior to the enactment of the Affordable Care Act, consumers really had no idea how much of their money was actually being used toward health care services. For larger companies employing 50 or more people, that percentage increases to 85%.

The average rebate to families who purchase their own insurance is approximately $151, according to the U.S. Department of Health and Human Services, with the largest rebates expected in Mississippi, Alabama, Maryland, Delaware and West Virginia. Some states may have no rebates if insurance companies have complied with the 80% rule.


For more information, visit www.hhs.gov
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