The Catch: Aetna and Rebates

Joseph Zubretsky, the chief financial officer, said about the company’s statutory reports, approximately: “We followed the prescriptive form to the letter. It may or may not accurately reflect rebate amounts that ultimately will be paid, and I would caution you there are major definitional differences between that form and what will ultimately be used to calculate the rebate…. There is room for favorability in our financial results. We don’t disclose the amount, but since many of the pool operators are above the minimum, improved performance can fall to the bottom line this year, as well as last year.”

I think that means the GAAP rebate numbers could look better than the statutory numbers. 

MLR REBATES: KAISER SAYS THEY’LL TOTAL $1.3 BILLION

Analysts at the Henry J. Kaiser Family Foundation, Menlo Park, Calif., estimates insurers will end up paying out about $1.3 billion in PPACA MLR rebates this year.

That would average out to about $4 per U.S. resident and about $9 per U.S. resident with commercial health coverage.

In the individual market, about 3.3 million people, or 31% of holders of individual coverage, could get a total of $426 million rebates, and their rebates could average $127 per recipient.

In the small group market, 4.9 million enrollees could split $377 million in rebates, with an average rebate of $76 per recipient.

In the large group market, 7.5 million enrollees could split $541 million in rebates, with an average rebate of $72 per recipient.

America’s Health Insurance Plans (AHIP), Washington, is rolling its eyes at MLR rebate projections.

“Given the inherently unpredictable nature of health care costs, it is not surprising that some health plans expect to pay rebates to consumers in certain markets,” AHIP says in a statement. “However, the coverage disruptions and other unintended consequences of imposing a new arbitrary federal cap on health plan administrative costs are likely to outweigh any benefit these rebates will provide to consumers.”