Health premium rebates expected

$4.1 million due to insured within La.

Health insurance companies must return $4.1 million in premiums to 75,500 Louisiana consumers by Aug. 1 because of a federal Affordable Care Act requirement, according to the U.S. Department of Health and Human Services.

Nationwide, health insurers must reimburse $1.1 billion to 12.8 million people, with the average family getting back $151, the agency said.

The new health-care law, in use for the first time, generally requires that insurers spend at least 80 percent of premiums on medical care and quality improvement, or return the difference to consumers and employers, who often pay much of the insurance premium for workers.

“The 80/20 rule helps ensure consumers get fair value for their health-care dollar,” Health Secretary Kathleen Sebelius said in a news release.

Nearly two-thirds of the 12.8 million benefiting nationally are only entitled to prorated rebates, because they are covered by employers who pay most of their premiums. Workers typically pay about 20 percent of the premium for single coverage and 30 percent for a family plan. Employers pay the rest.

According to the administration report, 2.6 million households due rebates purchased their coverage directly from an insurance company.

The rebates average $94 for the 43,700 families in Louisiana covered by the policies, according to HHS. The agency did not list the companies that have to return money to policyholders.

The rebates are only a tiny percentage of the cost of health insurance. A 2009 report from consumer advocate Families USA found Louisiana families paid more than $11,000 for health insurance on average.

Humana, which expected to return some money to customers, said that it wasn’t surprising in the first year of the 80/20 rule, given the “inherently unpredictable nature” of health-care costs and utilization.

Under the Affordable Care Act, consumers will get the rebate in one of the following ways:

• A check in the mail.
• A lump-sum reimbursement to the credit or debit card used to pay the premium.
• A direct reduction in their future premiums.
• Their employer applying the rebate in a manner that benefits workers, such as lowering their share of the premium.

Meanwhile, consumer group Health Care for America Now said it’s possible that consumers will have to return the money if the U.S. Supreme Court overturns the Affordable Care Act or if Republicans in Congress repeal the law.

The health-care advocacy group was a major supporter of the 80/20 rule.

“For folks in these tough times, every little bit helps,” Health Care for America Now Executive Director Ethan Rome said.

Rome said health insurance companies have been ripping off consumers for a long time. He said so-called Obamacare stops that and puts a little bit of that money back in working and middle-class families’ pockets, unlike Republicans who talk about tax breaks for millionaires and billionaires.

The Associated Press
contributed to this report.