Report: $40 Million in Rebates Could be on the Way to Virginians
Tuesday, May 1, 2012
RICHMOND, Va. - The check could be in the mail by August 1 for some individuals and businesses in Virginia. According to an analysis by the Kaiser Family Foundation, 17 health-insurance plans collected about $40 million more than they should have, and will now have to pay it back to consumers under the new health-care reform law (ACA).
Jill Hanken, staff attorney with the Virginia Poverty Law Center, says the rebate is unprecedented.
"The Affordable Care Act requires health-insurance plans to pay a certain amount of every premium dollar collected towards actual health-care services. This is called the medical loss ratio."
Hanken says insurance companies are required to spend 80 cents of every premium dollar on actual health care or quality-improvement programs.
The new law limits the amount insurance companies can spend on administrative and marketing costs, as well as CEO salaries.
"This is one of the most significant aspects of the Affordable Care Act, in terms of trying to reduce the high cost of health insurance."
Kaiser estimates the rebate for each enrollee in Virginia will be between $26 and $110, depending on the type of plan. It could be in the form of a check or a discount on future premiums. Nationally, insurance companies owe about $1.3 billion in rebates.
Over 642,000 Virginians are expected to receive rebates. According to the Kaiser Family Foundation, the largest rebates overall could go to consumers in Florida and Texas. The names of the insurance companies involved will not be known until all companies have filed reports later this year.
The Kaiser analysis is at www.kff.org.
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