This article first appeared in the St. Louis Beacon, July 5, 2012 - Many consumers will get rebates on their health insurance premiums now that the Affordable Care Act has been upheld by the Supreme Court. The law says consumers must get any rebates by Aug. 1 of each year in cases where insurers failed to spend at least 80 percent of premiums on medical services.
Data supplied by the Department of Health and Human Services show that 587,654 Missouri residents are due more than $60.6 million in rebates, averaging $173. Nationwide, consumers will receive a total of $1 billion in rebates, averaging $151, according to HHS.
Average rebates in states bordering Missouri are as follows: Illinois, $380; Nebraska, $215; Tennessee, $173; Oklahoma, $126; Arkansas, $114; Kentucky, $114; Iowa, $100; and Kansas, $91.
The money comes from the medical loss ratio rule that's part of ACA. The ratio is calculated on the amount of insurance premiums spent on health care and improving care quality as opposed to the amount used to bolster profit or to cover administrative and overhead expenses, such as salaries, marketing and bonuses for its workers.
The purpose of this rule is to encourage insurers to spend between 80 percent and 85 percent of premiums on care and quality. Those companies who spend less are required to return the excess amounts to consumers unless HHS is convinced the insurer had compelling reasons to spend less.
The new requirement doesn't mean consumers will automatically receive rebate checks. HHS says the insurer can meet the 80/20 rule by check, a lump-sum reimbursement to a credit card or debit card account used to pay the premium, or a reduction in the consumer's premium. If the rebate is coming from an employer, HHS says the company can use any of the above methods or "apply the rebate in a manner that benefits its employees."
Consumer Union offers an interactive map, listing insurers owing rebates by states and insurance markets. It lists the following information for Missouri:
Individual market
• American Family Mutual Insurance Co: $559,078
• American Republic Ins Co: $784,173
• Golden Rule Ins Co: $5,636,552
• John Alden Life Ins Co: $380,989
• World Ins Co: $581,459
• Humana Ins Co: $198,033
• Companion Life Ins Co: $215
• The Mega Life & Hlth Ins Co: $427,338
• Healthy Alliance Life Ins Co (Anthem BCBS): $7,370,008
• Coventry Hlth & Life Ins Co: $232,037
• Time Ins. Co.: $159,719.00
• Total: $16,329,386
Large employer market
• Shelter Life Ins Co: $63,592
• United Healthcare Ins Co: $5,735,942
• Aetna Life Ins Co: $111,161
• Total: $5,910,696
Small employer market
• Trustmark Life Insurance Company: $83,432
• UnitedHealthcare Ins Co: $5,250,613
• BCBS of KC: $5,534,725
• Healthy Alliance Life Ins Co (Anthem BCBS): $20,120,117
• Hmo MO Inc: $6,225,311
• Federated Mutual Insurance Company: $1,210,283
• Total: $38,424,482
