government
Insurers will pay $1.1 billion back to consumers
NEWS IN BRIEF — Posted July 9, 2012
Nearly 13 million Americans will receive a total of $1.1 billion in rebates from insurance companies this summer due to a provision under the health system reform law. The rebates will average $151 for each family covered by a private policy, the Dept. of Health and Human Services announced.
The reform law requires insurance companies to spend at least 80% of consumers’ premium dollars on medical care and quality improvement, with a maximum of 20% going toward profits and administrative costs, such as salaries, sales costs and advertising. Starting in 2012, insurers must notify customers as to how much of their premiums have been spent on actual medical care and quality improvement.
Insurers that don’t meet the 80% threshold must provide their policyholders with rebates for the difference no later than Aug. 1. “The 80/20 rule helps ensure consumers get fair value for their health care dollar,” HHS Secretary Kathleen Sebelius said.Consumers can receive rebates either through a check in the mail, a lump-sum reimbursement to the same credit or debit account they use to pay premiums, a reduction in future premiums, or through the employer that sponsors their insurance.
Note: This item originally appeared at http://www.ama-assn.org/amednews/2012/07/09/gvbf0709.htm.
