Maine to receive $1.8M in health insurance rebates

Posted July 24, 2014, at 4:41 p.m.

Health insurers will send out about $330 million in rebates to employers and individuals this summer under President Barack Obama’s health care law, the U.S. Department of Health and Human Services said Thursday.

The law, often called Obamacare, requires insurance companies to refund customers when they spend less than 80 percent or 85 percent of health care premiums they collect for medical care.

The rebates will go to about 6.8 million people, valued at about $80 per family. By Aug. 1, the funds either will be sent directly to consumers or to the employer who provides the health coverage and is required to pass the savings onto employees, the agency said in a report.

Maine will receive $1.8 million in rebates, according to DHHS. In Maine, all rebate checks will be issued to small and large employers. Health insurers in Maine’s individual market — which serves those who buy health insurance on their own rather than get coverage through an employer or government programs — complied with the requirements and won’t issue rebates.

The funds will benefit nearly 20,000 Maine consumers this summer, averaging $149 per family. Employers must pass along the rebates to their employees in some form, such as by lowering premiums or improving coverage.

One Maine insurer, Aetna, through its health and life insurance companies, failed to meet the requirements and will issue rebates.

“The insurance companies are only writing checks because they did not set their rates appropriately,” Mitchell Stein, an independent Maine health policy consultant, said. “It’s a good sign for Mainers that there is only one insurance company that is paying rebates this year. With luck, next year no insurers will need to do so because their premiums were low enough to begin with.”

The national rebate figure is lower than last year, when the insurers were told to send out $500 million under the law. The decline is a trend the government said shows more insurers are charging lower premiums than they would have if the law were not passed.

The health care law was passed in 2010 and the medical loss ratio, or MLR, portion of the law was first applied in full in 2011. It limits spending on administrative costs, salaries and bonuses. Other portions of the law went into effect this year, including the creation of exchanges to sell insurance to individuals as well as the expansion of Medicaid.

If insurance companies maintained the 2011 ratio of premiums relative to the cost of medical care, consumers would have spent $3.8 billion more in additional premiums in 2013, the health agency said.

Florida will receive the most rebates in the country this year, with $41.7 million returned, it said.

BDN Health Editor Jackie Farwell contributed to this report.

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