Am I Getting An Insurance Refund?

In recent weeks, millions of Americans have been pleasantly surprised to find checks in the mail. The reason? The Affordable Care Act’s 80-20 rule requires that health insurance companies in the individual and small group markets spend no more than 20 percent of our premium dollars on advertising, profits, and administrative expenses. Those that didn’t spend 80 percent on healthcare and quality improvement in 2011 must rebate the difference to their beneficiaries by August 1st.

This means that 1.5 million Texans are receiving $167 million—an average rebate of $187! For those with individual Blue Cross Blue Shield policies, which account for the majority of Texas’ rebates, the average amount refunded is $316. Of those who qualify, some will receive checks directly, while others will see lower future premiums or a reimbursement back on their credit cards.  If you have a small group policy and your employer got the refund, you’ll still see the savings, most likely through lower premiums in the months ahead or in expanded benefits for the remainder of the year.

If you’re wondering whether you’ll be getting a rebate, the U.S. Department of Health and Human Services has developed an online tool to help. Simply click the link, choose your state and insurance company, and select “MLR”. You’ll be able to see what portion of your insurance premiums was spent on actual healthcare, along with the average refund amount for your insurance company. If you have a policy through a small company, you can check with your office manager or HR department to find out if you will be getting a rebate.

Marcus Denton is a health policy intern at the Center for Public Policy Priorities.

The 80-20 Rule Explained

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