Thanks to the Affordable Care Act, millions of people are expected to receive checks from their insurance companies this year. Kaiser Health News estimates that insurance companies will be sending $1.3 billion back to consumers under a provision in the Affordable Care Act that requires insurance carriers to spend 80-85% of premium dollars on actual health care costs rather than administrative costs, marketing, etc. Almost one-third of people on the individual market are expected to receive rebates, and many small businesses will see a return as well.
Kaiser estimates that four insurance companies in Nebraska will have to return over $2.6 million to Nebraskans enrolled in individual plans. Nearly 23% of Nebraskans enrolled in plans through the individual market will get a rebate. Three insurers in the small group market will also pay rebates of about $1.3 million. All told that is $3.9 million that insurance companies collected in premiums but which they didn’t use to pay medical claims. In the past, that money would have been additional profit for those insurers. Thanks to the ACA that money is instead being returned to Nebraskans. This is a key provision of the ACA that insures Nebraskans are getting value for their premium dollar.
In other good news, while the rising cost of healthcare must continue to be a major focus of any successful reform efforts, the New York Times reported some good news: health spending has slowed substantially in the last few years. Although some of the slowdown is attributable to the recession, it appears that the reduction is also related to changes in behavior of both consumers and providers, meaning that we could see more reductions in the future.