ObamaCare Induced Insurance Rebates! Did You Get One ...

One of the provision in?the Affordable Care Act (ACA), better known as ObamaCare, requires insurance companies to spend at least 80-85% of consumer-paid premiums on the consumer?s healthcare and quality improvement initiates, depending on the size of the market the insurer operates in.

Previously insurance companies were using a larger percentage of the consumer?s premiums for such things as administrative costs and increasing profits. ACA curbed those practices, and last Wednesday insurance companies began to send rebate monies to consumers. Many consumers received a rebate check in the mail this past week.

Insurance companies silently mailed about $1.1 billion to 12.8 million Americans in rebates. This was less than was expected because insurance companies began to institute changes after the passage of ACA last year, per what is known as the Medical Loss Ratio (MLR), a tool long used by state governments to regulate insurers.

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The need for the insurance regulation was seen in a study by the consulting firm Towers-Watson showing that health care costs have grown 5.9% in the last year, while employees? share of premiums increased 9.3%. ?MLR rules reduces the amount the insurance company is allowed to make in profit, without reducing the standards of coverage the person receives.

Future rebates are likely to be lower as more insurers comply with the MLR rules. Even if you did not receive a rebate check, as most American?s did not, this is still great news for consumer?s as insurance companies can no longer raise premiums simply to increase their own profits. They are accountable and must refund surplus premium monies back to the consumer. Thanks to ObamaCare, any increase in premium in our health insurance must be justified by the same increase in cost of healthcare.

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Source: http://www.addictinginfo.org/2012/08/03/obamacare-induced-insurance-rebates-did-you-get-one/

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