The federal rule mandating that insurers spend at least 80 cents of every premium dollar on health care has generated $332 million in rebates nationally to policyholders.
The Department of Health and Human Services said this week that the Affordable Care Act’s medical loss ratio rule generated a far lower rebate total for 2013 than 2012’s $504 million and 2011’s $1.1 billion.
The smaller rebate bill indicates that insurers are doing a better job of pricing their premiums, estimating the costs of medical services used by their policyholders or holding down administrative costs.
Among insurers selling policies on the individual market in Kansas, Blue Cross and Blue Shield of Kansas City was listed as owing $1,175,528 in medical loss ratio refunds. The second highest refund owed in the individual market in Kansas was for Golden Rule Insurance Co. at $721,922.
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In the Kansas small-group market, Humana Insurance Co. tallied the largest refund owed at $687,935.
Among insurers selling policies in Missouri, HHS said Blue Cross and Blue Shield of Kansas City owed $2,395,282 in small-group market refunds. UnitedHealthcare Insurance Co. had the largest small-group refund listed for the state at $3,923,960.
In the Missouri individual market, the biggest refund due was listed as $1,780,707 for Time Insurance Co. The Healthy Alliance Life Insurance Co. had the largest overall refund due in Missouri with more than $2.3 million combined for the individual and group markets.
According to Health and Human Services, the medical loss ratio rule saved consumers $4.1 billion last year. The law requires insurers that don’t meet the 80 percent standard to send reimbursement checks to individuals or their small-group entities.
At Blue Cross and Blue Shield of Kansas City, chief of staff Wayne Powell said the reimbursements were well within the insurer’s expectations and amounted to about $59 per individual consumer in Kansas and about $70 per member for its Missouri-side small group business.
“Based on estimates we had to make 18 months ago, we underestimated the amount we’d spend on medical expenses,” Powell said. “That could mean our members were healthier than we thought they’d be or they used fewer health care services than we expected or the costs of the services were lower than we expected.”
Powell said, “We made a provision for this under the assumption we’d hit the (80 percent) target, so those dollars are available for rebate,” noting that the checks to individuals and employers will be in the mail within days.
Nationally, the 2013 average medical loss ratio rebate check is for $80. About 6.8 million Americans are expected to receive a rebate benefit.
Health and Human Services said Missouri was among four states that reported the highest medical loss ratio refunds. Florida was tops with 12.5 percent of all rebates last year.
Nationally, insurers refunding the most were Blue Cross and Blue Shield of Florida; Neighborhood Health Plan, run by Partners HealthCare; and subsidiary plans of UnitedHealth Group, Aetna, Human and Cigna.