By August 1, health insurance companies have to refund $1.1 billion in premiums to about 12.8 million customers, thanks to the Affordable Care Act.
The "80/20 rule" in the ACA mandates that health insurers spend at least 80% of their customers' premiums on health services, leaving no more than 20% for administrative costs and advertising. That means if an insurance company spends 78% of the money it collects on health benefits for customers, it has to send rebate checks for the additional 2%.
I'm curious how this really works. If an insurance Co takes in 1,000,000 in premiums in 2012, and spends only 700,000 in patient costs in 2012, they send $100,000 back to the patient. Say, in 2013, they take in that same $1,000,000 and they had 2 cancer patients, and their out of pocket is 1,200,000. Do they get to collect additional $$? Do they run a negative for 2014, which is recouped if they only spend $700,000 again? Doesn't this invite fraud btwn docs and ins companies?
Who gets the $$...the patient? The employer? Does it go back in proportion to who paid?
Too bad future generations aren't here to see all the great things we are spending their $$ on!!
Good questions. I know that I used a LOT of insurance money this year so should the refunds go to people in my group who haven't used an inordinate amount or is it split equally?
towermonkey wrote: Good questions. I know that I used a LOT of insurance money this year so should the refunds go to people in my group who haven't used an inordinate amount or is it split equally?
Seems to me that would be the way to do that. Kind of like workers comp. Companies who have great safety records in a year where dividends are available receive nice chucks of $$. Those who had a lot of claims receive little or nothing.
Too bad future generations aren't here to see all the great things we are spending their $$ on!!
