Texas consumers and businesses are poised to receive an estimated $186 million in rebates from health insurers under a requirement of the Affordable Care Act, according a study released today by the Kaiser Family Foundation.
The health care act’s medical loss ratio provision requires insurers to issue rebates if their total administrative expenses and profits are relatively higher than those permitted under the act. The Kaiser study estimates that 92 percent of Texas consumers in the individual insurance market will receive rebates, the highest figure for any state in the country.
The provision, which went into effect in January 2011, requires that insurance companies covering individuals and small businesses spend at least 80 percent to 85 percent of insurance premium dollars on health care and improving care quality. The provision is designed to curb spending on administration costs and profit. When insurers don’t meet the 80/20 ratio, they are required to distribute rebates, as they will be doing come August. The Kaiser Family Foundation estimates those rebates based on 2011 data will total $1.3 billion nationally.
Sarah Kliff has more on this. I propose that if SCOTUS does strike down Obamacare that Greg Abbott and all of the other Attorneys General who litigated against it be required to cover the cost of the lost refund to consumers. Who’s with me?