Health insurance plans owe $1.1 billion in rebates

The Washington Post

Millions of consumers and businesses will receive $1.1 billion in rebates this summer from health insurance plans that failed to meet a requirement of the new health-care law, according to the Health and Human Services Department.

That Affordable Care Act rule requires insurance companies to spend at least 80 percent of subscriber premiums on health-care claims and quality improvement initiatives. The other 20 percent is left for administrative costs and profits.

Health insurance plans that don’t hit that threshold will send a rebate to consumers to cover the difference.

There could, however, be one big hitch. If the Supreme Court overturns the health-care law — a decision that could come as early as Thursday morning — experts say those checks are unlikely to hit Americans’ mailboxes.

“If [the Supreme Court] says the law is unconstitutional, insurers couldn’t be forced to pay rebates based on unconstitutional laws,” said Tim Jost, a law professor at Washington and Lee University.

In a new report, the Obama administration found that 12.8 million Americans will receive rebates this year, with an average value of $151 per household.

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One comment

  1. It’s interesting how much unravelling will occur if the affordable care act is overturned. It’s going to be a mess no matter what the decision. Looking forward to receiving a rebate…or not. We’ll find out next week! – Jared

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