PROVIDING REFUNDS FOR MILLIONS OF CONSUMERS Under the Affordable Care Act, insurance companies are required to spend 80 to 85 percent of premium dollars on medical care and health care quality improvement, rather than on administrative costs or CEO bonuses. If they don’t, the insurance companies must provide a refund to their customers. Americans can receives these refunds in several ways: a refund check in the mail; a lump-sum reimbursement to the same account that they used to pay the premium if by credit card or debit card; a reduction in their future premiums; or their employer providing one of the above, or applying the refund in another manner that benefits its employees, such as more generous benefits. While most insurance companies are spending premium dollars consumers pay on their health care, before the enactment of the health care law, there was no way for all Americans to make sure that their premium dollars were primarily being spent on their health care and its improvement. The health care law’s “Medical Loss Ratio” provision cracked down on the worst insurance companies that were not providing Americans the value consumers expect from their premiums. According to a recent report from the Centers for Medicare and Medicaid Services, in 2012 8.5 million consumers received half a billion dollars in refunds – with the average consumer receiving a refund of around $100 per family. Moreover, in 2012, 77.8 million consumers saved $3.4 billion up front on their premiums as insurance companies operated more efficiently as compared to 2011.
Posted on: Wed, 24 Jul 2013 18:50:00 +0000
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