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Under the Affordable Care Act, health insurance companies must reimburse premium income if it exceeds certain levels. The medical loss ratio provision of the law states that insurers can only keep a certain percentage of money for administration, marketing and profits. This year, insurers will issue approximately $ 2.1 billion in refunds.
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The reimbursement represents the second largest amount since the introduction of ACA in 2012. In 2020, insurers issued $ 2.5 billion in rebates. However, the 2021 discounts are more than 50% higher than the pre-2020 record of $ 1.4 billion, issued in 2019, according to research compiled by Mark Farrah Associates and reported by KFF.org.
Expected rebate amounts vary by market, with individual markets repaying the highest amount of $ 1.5 billion, insurers in the small group market repaying $ 308 million, and large group market insurers repaying 310. millions of dollars. Since some insurers have yet to file their final reimbursement data, the 2021 number could be even higher.
Based on data from Mark Farrah Associates, more than 10,766,000 members could receive a discount, with an average of $ 198 per reimbursed member.
Telehealth cuts insurance costs
KFF.org reported that the larger than normal discounts over the past two years are likely due to “phased out health care use” during the pandemic. Elective surgeries have been postponed by hospitals over concern for space and resources, while many have postponed routine doctor visits and preventive care to practice social distancing. Although telehealth claims have increased, this method of practicing medicine more affordable and has not made up for lost costs. Even spending on COVID-19 testing and treatment did not make up for the drop in spending in 2020 and 2021.
Some insurance companies have offered ‘premium vacations’ or waived patient costs to reduce their profits, which has helped reduce reimbursements in 2020 where this number would have been even higher than the $ 2.5 billion advertisement.
In 2021, although the total amount of reimbursements is exceptionally high, most of these reimbursements are issued by individual insurers. Repayments in the large and small group market remain relatively stable compared to repayments in 2018 and 2019.
How can you get your refund back?
If you get your health insurance from the ACA market, you could have an unexpected windfall. If you purchase your health insurance policy in the personal market, your insurance company may give you a premium credit or issue a payment by check.
If your employer purchases your insurance through a group policy, your employer will receive the payment and may share the reimbursement with employees, depending on the plan contract and how the policyholder and participants share. premium costs, reports KFF.org.
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Reimbursements of less than $ 5 for individuals and $ 20 for group coverage, however, do not need to be reimbursed under the law, as the administrative costs could exceed the amount of the reimbursement.