More than 981,000 Floridians will get an average refund of $65 from their health insurers this summer because of the Affordable Care Act, federal officials announced today.
The law's so-called "80/20" rule, also called the medical loss ratio, requires insurers in the individual and small group markets to spend at least 80 percent of premium dollars on patient care and such activities as hospital discharge planning and nursing hotlines. Insurers in the large group markets, generally defined as those with more than 100 workers, must spend more on such services, 85 percent.
If insurers put too much toward profits and overhead, they must refund consumers.
Though the refunds are the most tangible effect of the rule, the primary goal is to help keep the costs of premiums in check. That's not an easy savings to calculate, but the federal government estimates that consumers last year saved $3.8 billion in reduced premiums. Premium savings were defined as the amount that consumers would have paid if their insurance company's medical loss ratios had not improved since 2011.
Nationwide, consumers are due about $332 million in refunds, a figure that covers both the individual and group markets, the U.S. Department of Health & Human Services said. Floridians are getting nearly $42 million of that.
"The 80/20 rule is bringing transparency and competition to the insurance market, ensuring that consumers are continuing to receive value for their premium dollars," Secretary Sylvia Burwell said. "Standards like these created under the health care law are providing Floridians with immediate savings and are helping to keep costs down over the long term."
Floridians should have their refunds reflected in one of several ways. Individual policy holders might get their refund checks in the mail. Consumers with job-based coverage might not directly receive their refunds, which go to their employer.
Contact Jodie Tillman at [email protected] or (813) 226-3374. Follow @JTillmanTimes.