Make us your home page
Instagram

Report: Rebates from health care law will top $1 billion

WASHINGTON — More than 3 million health insurance policyholders and thousands of employers will share $1.3 billion in rebates this year, thanks to President Barack Obama's health care law, a nonpartisan research group said Thursday.

The rebates should average $127 for the people who get them, and Democrats are hoping they'll send an election-year message that Obama's much-criticized health care overhaul is starting to pay dividends for consumers. Critics of the law call that wishful thinking.

The law requires insurance companies to spend at least 80 percent of the premiums they collect on medical care and quality improvement or return the difference to consumers and employers. Although many large employer plans already meet that standard, it's the first time the government has imposed such a requirement on the entire health insurance industry.

"This is one of the most tangible benefits of the health reform law that consumers will have seen to date," said Larry Levitt, an expert on private insurance with the Kaiser Family Foundation, which analyzed industry filings with state health insurance commissioners to produce its report. Kaiser is a nonpartisan information clearinghouse on the nation's health care system.

Still, with employer coverage averaging about $5,400 a year for an individual, $15,100 for a family, $127 isn't a whole lot of money. It amounts to 2 percent of an individual plan, and a little less than 1 percent of the family premium.

And the insurance industry says consumers should take little comfort from the rebates because premiums are likely to go up overall as a result of new benefits.

"The net of all the requirements will be an increase in costs for consumers," said Robert Zirkelbach, spokesman for America's Health Insurance Plans, the main industry trade group.

"Given that health care costs are inherently unpredictable, it's not surprising that some plans will be paying rebates to policyholders in certain markets," Zirkelbach added.

But the Kaiser report said the rebate requirement may be acting as a brake on the industry, discouraging insurers from seeking big premium increases to avoid having to issue refunds later and face possible criticism.

"The presence of these thresholds and the corresponding rebate requirement have provided an incentive for insurers to seek lower premium increases than they would have otherwise," the report said.

The study found the largest rebates will go to consumers and employers in Texas and Florida, where Govs. Rick Perry and Rick Scott have been among the staunchest opponents of the federal law. Both states applied for waivers from the 80 percent requirement and were turned down.

Report: Rebates from health care law will top $1 billion 04/26/12 [Last modified: Thursday, April 26, 2012 10:22pm]
Photo reprints | Article reprints

    

Join the discussion: Click to view comments, add yours

Loading...
  1. Tampa is 15th-most popular city to move to with U-Haul

    Markets

    TAMPA —Tampa is undoubtedly a destination point, at least according to U-Haul.

    Tampa is the No. 15 destination for people moving with U-Haul trucks. | Times file photo
  2. Florida's economy growing faster than other big states and far better than U.S. overall

    Business

    When it comes to economic growth, Florida's running alongside the leading states and well ahead of the United States as a whole.

  3. Westshore Marina District project takes shape with another acquisition

    Real Estate

    TAMPA — One of Tampa Bay's prime waterfront areas took another major step toward redevelopment Friday as WCI Communities bought 2.35 acres in Westshore Marina District.

    WCI Communities, Lennar's high-end subsidiary,has paid $2.5 million for 2.35 acres in the Westshore Marina District for 35 townhomes. WCI is under contract  to buy an additional 9.5 acres.
[BTI Partners]
  4. Posh Guy Harvey RV park to open in Tampa Bay with $250,000 cottages

    Business

    HOLIDAY — Love those Guy Harvey T-shirts with the soaring marlins? In the not too distant future, you might be able to kick back in your own Guy Harvey cottage in the first-ever Guy Harvey RV park.

    Renderings of the clubhouse and an RV cottage site of the planned Guy Harvey Outpost Club & Resort Tarpon Springs.
[Guy Harvey Outpost Collection]
  5. Port Tampa Bay secures $9 million grant to deepen Big Bend Channel

    Business

    Port Tampa Bay has secured a $9 million grant from the U.S. Army Corps of Engineers for the widening and deepening of the Big Bend Channel in southern Hillsborough County.