8.2 million people could soon be reimbursed by their health insurance

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Depending on how you get your health insurance coverage, you may soon receive a discount from your insurer.

According to an analysis by the Kaiser Family Foundation, an estimated 8.2 million policyholders will receive $1 billion in rebates from various insurers by September 30.

Refunds generally average about $141 per participant in plans through the public marketplace, $155 for those who have small employer plans, and $78 for participants in large group plans (excluding those with businesses, who insure themselves).

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However, the amount of the discount can vary greatly depending on location and insurer.

Total refunds of $1 billion are down from $2 billion in 2021 and a record $2.5 billion in 2020.

“In recent years we’ve seen some really big rebates – double what we’ve seen this year,” said Cynthia Cox, the foundation’s vice president and director of the Affordable Care Act program. “But I would say $1 billion is still significant.”

Insurers typically either send a check to policyholders or deduct the rebate from premiums (and send a check to people who are no longer registered but owe some money). Note that if you’re on a group plan, your employer can share the discount with you, Cox said.

Health insurers pay rebates to meet the “medical attrition rate.”

Why are the discounts running out?

Basically, insurance companies that sell group or individual policies are required to meet a “medical loss rate” that requires them to spend at least 80% of the premiums paid by insureds on healthcare costs and certain other expenses related to the patient’s health. (For large group plans, the ratio is 85/15.) If this threshold is not met, participants will be reimbursed the difference.

The ratio is calculated each year based on a three-year rolling average. The rebates this year are therefore based on the financial data of the insurance companies from the years 2019, 2020 and 2021.

https://www.cnbc.com/2022/08/12/8point2-million-people-may-soon-get-a-rebate-from-their-health-insurer.html 8.2 million people could soon be reimbursed by their health insurance

Drew Weisholtz

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