Calif. Residents Expected To Receive $73.9M in Insurance Rebates

About 1.8 million Californians are expected to receive a total of $73.9 million in health insurance rebates under a federal health reform law provision, the Sacramento Bee reports.

Nationwide, about 12.7 million people are expected to receive a total of about $1.1 billion in rebates by Aug. 1 (Buck, Sacramento Bee, 7/25).

Background

Under the reform law's medical-loss ratio rule, private insurers must spend at least 80% in the individual market or 85% in the group market of premium dollars on direct medical costs.

Insurers that do not comply with the ratio must issue rebates to consumers (California Healthline, 6/21).

Rebate Details

The average rebate amount in California is about $65 per family, according to the Bee.

Federal data show that the average rebate per California family is:

• $30 for those in the individual insurance market;
• $203 for those in the small group insurance market; and
• $43 for those covered by large group employers.

The rebates can be provided through a variety of ways, such as:

• Checks;
• Discounts off of future insurance premiums; or
• Lump sums deposited into credit card or debit accounts used to pay premiums.

Insurers Issuing Rebates in California

Janice Rocco -- deputy commissioner for the California Department of Insurance -- said six of the eight largest health insurers in the state that provide individual or large group coverage are issuing rebates, including:

• Aetna;
• Anthem Blue Cross;
• Blue Shield of California;
• Cigna;
• Kaiser Permanente; and
• Pacific Care.

According to the state Department of Managed Health Care, Anthem Blue Cross and United Healthcare are issuing rebates that total $42.4 million to policyholders in the small group market.

Rocco said that most of the insurers in the state who are issuing rebates were "pretty close" to meeting the MLR standard (Sacramento Bee, 7/25).