U.S. health insurers could end up paying about $1.1 billion in minimum medical loss ratio (MLR) rebates to 13 million plan members, according to officials at the U.S. Department of Health and Human Services.
HHS officials give the MLR rebate payment projections in a report on how the rebate program is going.
Provisions in the Patient Protection and Affordable Care Act of 2010 (PPACA) require carriers to spend at least 85% of large group revenue and 80% of individual and small group revenue on health care and quality improvement efforts or else pay rebates.
Carriers have used a process developed by state insurance regulators at the National Association of Insurance Commissioners (NAIC), Kansas City, Mo., and approved by HHS to compute and report on PPACA MLR rebate obligations.
HHS will soon be posting individual carriers’ MLR rebate data here, officials say.
Up till now, few individuals have heard much about the PPACA rebate provision.
Analysts at the Henry J. Kaiser Foundation Family Foundation, Menlo Park, Calif., said in November 2011 that only 38% of the participants in a Kaiser survey had heard of the PPACA minimum MLR requirement but that 60% said they liked the idea of requiring health insurers to meet minimum MLR requirements.
Now rebate checks and refunds may be going out to consumers as election season heats up.
Defenders of the MLR system say it can protect consumers against unreasonably high coverage prices.
Opponents say the new rules are cumbersome and expensive to administer, limit the ability of insurers to respond to changing conditions, and may encourage insurers to reduce payments to the same insurance brokers who are trying to help consumers navigate the health insurance market.