Quite a few Americans are going to go to their mailbox this week and next, open it, and find something unexpected: a check from their insurance company. It's another side benefit from the Affordable Care Act that most Americans mistakenly thinks they don't like.
When Laird Le found a check for $70.02 in the mail, he wasn't quite sure why. Turns out, he's one of the estimated 13 million Americans that will receive a rebate on their health insurance premiums as a result of the health care reform law recently upheld by the Supreme Court.
Look inside your mailbox: By the end of the month, you could be one getting one of these refunds, which are expected to total $1.1 billion this year. Health insurance companies have begun sending letters to customers informing them of a new rule requiring them to spend at least 80 percent of the premiums they receive on actual medical care, not on overhead, advertising, profits or other costs. Health insurers must cite the health care reform law, known as the Affordable Care Act, in the letter.
The technical name for this is the medical loss ratio (or MLR), but it's much simpler than it sounds. "Obamacare" has an 80/20 rule, which requires insurance companies to spend roughly 80% of all premiums on actual health benefits, rather than company overhead (marketing, lobbying, executive salaries, etc.). When an insurer spends less than 80% on health care for its customers, the company is required to send the customer a check for the difference.
How many checks are we talking about? According to the Kaiser Family Foundation, nearly 16 million Americans will get rebates before the legal due date, which is Aug. 1. As a result, many of the checks -- some of which will be small, some may be worth over $500 -- will hit mailboxes this week.
The point of this policy in the law, of course, is to benefit American consumers, while at the same time, encouraging efficiency and lower premiums among insurers.
But there's also a political angle to keep in mind.
As we talked about in May, folks like getting unexpected money in the mail. When they realize it's because of Obamacare, maybe the law will start to look a little better in those consumers' eyes.
That checks will hit mailboxes, along with a message explaining the reasoning behind the money, a few months before the election probably doesn't hurt Obama's potential benefit, either.
It's also worth keeping in mind these rebate checks will disappear if Republicans kill the entirety of the law, replacing it with nothing, next year.
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And for all of you who are still fighting Obamacare, please mark "return to sender" on the envelope as not to be hypocritical against your principles of big gubment infringing on your freedom and liberties.
Dang it, you beat me to the punch.
So my premiums went up $500 last year and I'm supposed to be happy about getting a $70 check in the mail? Is this the new math?
No, you're right, it's better that the insurance company should keep your $70.
Marty, you might want to look into a new insurance company, or perhaps think about how your health might be driving these increases. If they jacked them up for no reason of care, you can expect that money back... or did you not catch that part?
Update: we got our check! We paid almost $10,000 in premiums last year and today we got a check for $10.11. Yeah baby. That's some change you can believe in. What a triumph! /s
... the marty issue is that the hefty money he paid to the insurance company went to prop up the CEO while sitting on the waterloo, doing bugger all.
What a great political ad. At the end, President Obama winks, and one of those little "stars" comes out by his eye. Keep it comin'!
My wife got a check yesterday, for over $300.
The good news, it was over $300.
The bad news is it means her insurance company has been ripping her off for years!
My insurance company- aka 'Medicare'- is a pretty good deal, by comparison.
Yes medicare is great,and A-hole repubs want to kill it.Just as they want to kill the ACA.They want to kill anything that help's the poor and middle class.
Being on Medicare, I agree it is a good program. But even the govt says it will run out of money. You may not agree with the Repub plan, but Dems just ignore it. Stop misleading and demegouging. Propose a budget.
If only your post were true, Tom:
Fox Distorts Trustees' Report to Fearmonger About Social Security and Medicare:
http://mediamatters.org/research/2011/05/16/fox-distorts-trustees-report-to-fearmonger-abou/179656
And Obama as well as the Democrats DID propose a budget:
http://www.whitehouse.gov/omb/budget
Seeing as how you depend on Medicare, it would be in your best interests to educate yourself about these issues, and educate yourself about the people who would want to end Medicare as YOU know it: Paul Ryan, Mitt Robme, and the GOP.
http://www.politico.com/news/stories/0412/75501.html
From our govt.
Yes, the pres did propose a budget, which did not get one vote.
I was referring to the fact the Senate has not passed a budget in 3 yrs which could then be taken to conference
The Democrat senate fallacy- there is no super majority. Call it what you will the Congress, house and senate are run by the republicans.
Government can only fix problems on balancing income and expenditure. Medicare will not go broke if more revenue is there to balance the act and that's the hated word- TAX.
This is excellent news - and a nice little "stimulus" to boot.
Don't spend it all. What wasn't mentioned was the person who received the rebate paid $160 a month. So, the rebate amounts to less than4% of premiums. Plus, if you get insurance through your employer, you probably won't get a rebate.
Sounds like Tom will be scrawling "Return To Sender" on his refund.
that was my thought, June: a $1.1 Bn stimulus certainly can't hurt. along with reduced gas prices (where is all the media coverage of Republicans blaming Obama for lower gas prices, anyway?) that is a nice amount of additional money for consumers to put to work in the economy.
Wished I'd had health insurance this past year, it'd been nice to get a little sumpin back.
Who monitors the 80/20 thing?
Big gubbamint!
must keep it democratic and honest, what.
Keep in mind, not everyone will receive checks because some insurers are very good about keeping their costs in check. As someone who has worked for an HMO for over 10 years, some of them do it right. Disclaimer, I do support Obamacare.
You know it. whole new departments have sprung-up to ensure they hit the ratio and reclassify any overages as a benefit.
Just as sure as the penalties for not buying insurance will go up, I'd like to see the 20%/year profits go down...
The 20% a year is not pure profit at all. That covers administrative expenses (payroll) office supplies, and all the other overhead to running a business.
Yes, it does. And until recently insurers were paying a whole lot less on "administrative expenses (payroll) office supplies, and all the other overhead to running a business," which have somehow outpaced even the cost of medical care.
Talk about administrative cost. I have experience with health insurance in UK and now in USA.
In UK, there was zero administrative cost. The health insurance was part and parcel of the monthly income tax deducted from the pay check. The doctor and patient relationship was never marred by insurance policy.
In the USA, even when you are not claiming insurance expenditure, the monthly dues involve piles of mail back and forth. When you try to settle medical bills the nightmare is enough to induce a heart attack.
Health insurance for profit, american style, mocks human dignity, reduces it to car body parts.
I've been eagerly awaiting this, not to see if I get a refund, but to see what happens to Democrats' poll numbers. Well played, Mr. President!
I am so glad the government is going to be setting profit margins! For too long too many industries have been making too much money. Take Microsoft for instance, computer software has one of the highest profit margins, sometimes the computer software cost more than the computer. Ridiculous!
We need the government to step in and fix this! I want a refund from everybody!
Yeah RobDon, because we all want the insurance companies to take as much of our money as they can, deny coverage on a whim, and party with the profits when health care is something everybody needs. There's a difference between consumer demand for software and societal needs for healthcare.
Huh? The government is not supposed to be in the business of micro-managing private enterprises. There are some functions that are so integral to the public good that they require regulation. Public concern about health care expenses has made this issue one in which the government has found a justification for intervention. If the insurance industry had been able to make coverage more effective and available, this would not have been an issue. As it is, when a person has no means to pay for medical services, they are left with emergency services, which are extremely costly and are paid for by overcharging those with coverage and those who pay out of pocket.
Many other business sectors do not impact the public in the same way, and are not under the same level of scrutiny. When Microsoft's business practices elicited public outcry, the company was placed under some restrictions according to antitrust laws. There was no effort made to dictate the company's profit margin. The level of profit was considered the company's concern, and not subject to government intervention.
My own opinion is that the current healthcare system and the system to pay for it has shown itself inadequate, especially now that alternative systems in other countries have proven up.
When Microsoft starts denying you the use of your software when you start to really need it, then you might have an argument, RobDon. For now, it falls flat.
As of July 1, my (already high) premiums went up $25 a month. It would take a decent-sized check to counteract just this. But, within days of the SCOTUS decision, I got a mailing from them: "We sent you a new card recently. Please destroy it, and use the one we're sending now". The difference? My copays got slashed. Never thought I'd see the day; they'd been going up and up for years, especially after I had to actually use one of the services (like out of network specialist, or a hospital). Apparently, there're more ways to skin a cat, than by just sending out a check.
They've also decided to go on a PR blitz, pretending that they're more than just *insurance*; they're now very caring and concerned aunties. Got a mailing reminding me that my annual physical in now free (no copay) -- please avail yourself of it. And got an automated phone call begging me to talk to my doctor about scheduling a mammogram, a pap and colonoscopy, to make sure I'm getting all I'm entitled to get, when I'm entitled to it.
Wonder whether these efforts count in the 80% or the 20%...
Your free (or I should say 100% covered) physical is part of the 80%. The advertising, direct mail, etc to get you to take advantage of it is part of the 20%.
The best part of this is, LOBBYING is part of the 20%. How's THAT for cost control!
Does anyone know if this same rule applies to big pharma, or is it just the insurance companies? I'd love to see
fewerno more commercials telling us we need drugs that we don't really need.That nice glossy newsletter in your mailbox filled with health-tips.
Fox News headline will probably be, "Obamacare forces insurance companies to waste 20% of premiums on lavish executive perks."