Insurance Rebate

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Checks in the Mail: Millions to Receive $1.3 Billion in Health Insurance Rebates

By: Julie Appleby, Kaiser Health News

(Robin DeGrassi James: Flickr)

(Robin DeGrassi James: Flickr)

Millions of consumers and small businesses will receive an estimated $1.3 billion in rebates from their health plans this summer under a provision of the health care law that effectively limits what insurers can charge for administration and profits, a new study projects.

Almost one third of people who bought their own insurance last year will get rebates averaging $127, according to an analysis of state data by the nonpartisan Kaiser Family Foundation. (KHN is an editorially independent program of the foundation.)

“This alone is not going to make health insurance affordable for large numbers of people, but it is getting excess administrative cost out of the system,” says Larry Levitt, a study author.

The percentage of consumers and businesses in line for rebates varies widely by state. In Texas, for example, 92 percent of consumers who purchased individual policies are expected to get rebates because insurers spent too little of their premium dollars on medical care. But in Vermont, Rhode Island, Iowa and Hawaii, insurers are likely to owe less than 1 percent of consumers who bought policies on the individual market. Continue reading