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Happy health rebate month!

By Jay MacDonald · Bankrate.com
Friday, August 3, 2012
Posted: 10 am ET

It almost looked like junk mail. If I hadn't already been writing for months about a stealthy little health care reform perk known as the medical loss ratio rebate, I might have disposed of it unopened.

Instead, I ripped into it. Yes! A check for $803, no strings attached, courtesy of my now-former health insurance company.

I was one of approximately 12.8 million Americans who can expect to receive a whopping $1.1 billion in rebates from insurers who spent more on things like administrative costs and executive bonuses than the Affordable Care Act allows.

The medical loss ratio provision of the law, which kicked in last year, requires insurers who spend less than 80 percent of your premium dollars (85 percent for employer plans) directly on your health care to refund the difference to you every Aug. 1.

Self-employed workers who purchase their own policies are most likely to receive a rebate. When rebates are sent to employers, come may choose to put them toward future premium costs rather than return them to their employees. The size and number of rebates are expected to drop as more insurers toe the line.

For many, the MLR sounded more like a professional accreditation or major league sport -- until the checks started arriving. While the accompanying consumer explanation did little to ignite Olympic fever about the MLR itself, 800 bucks out of the blue is certainly something to cheer about.

Well, sorta. The realization quickly follows that my big windfall was, after all, money the company required me to pay them so some senior executive could keep his winter home in Barbuda stocked with Glenfiddich. Which is why I fired them in favor of a competitor whose executives at least drink Bud Light. But I digress.

If you would like to spoil the will-I-get-one surprise (and avoid inadvertently tossing away your rebate with the flyers), simply log onto Healthcare.gov, enter your insurance company or state, and you'll find a list of insurers in your state, their MLR ratios and the average rebate if any that they owe their customers.

Rebates aside, the real beauty of the medical loss ratio is that it makes it easier to tell if your health insurance company is ripping you off. 

I wish it had been around a year ago before I loaned my former insurer $800.

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62 Comments
Dennis Kauffman
August 11, 2012 at 11:13 pm

Hi Jay, Is it only if you were covered for 2011-2012 or does it go back further? Thanks

tom mahon
August 11, 2012 at 11:03 pm

Went to healthcare.org, but did not find any link to find insurance companies MLR ratios and average rebates. Is your information accurate or did I miss something?

K M
August 11, 2012 at 9:35 pm

That's great, unless Obama's jobless recovery has kept you out of work for two years or so. I guess I get nothing. And I could use $803 dollars right about now, as the state where I live is giving me grief over collecting unemployment.

M
August 11, 2012 at 9:29 pm

Oh please. My rebate was only $48, and I pay a big premium every month which does not include every single cost.

William Hardardt
August 11, 2012 at 8:44 pm

Will you please publish a list or the companies required to send out rebates. Then I won't have to hold my breath until the check arrives Thanks Bill

Cheryl Glick
August 11, 2012 at 8:36 pm

So, how do we find out if we will be getting one, I'm still confused. I work, but have my own health insurance policy. Do I qualify? If so, "show me the money."

LiLiana Wilson
August 11, 2012 at 8:16 pm

So just how *do* we know if we were supposed to get one?

nina mattei
August 08, 2012 at 9:22 pm

It would have been so helpful for you to post a picture. I have no idea what this envelope actually looks like.
thanks,--N

Rich Kopec
August 08, 2012 at 5:15 pm

Just called my insururer (last 20 years) American national li of Texas to ask about my rebate as a self employed individual. The rep told me the legal department is still checking to see if they have to comply? Typical AN BS !!! Boy I sure hope ths company finally gets its act together ...

Jay MacDonald
August 08, 2012 at 7:15 am

Actually, Sandra, you should be happy. Unlike me, your insurer charged you roughly what they should have under the new health care reform guidelines. Mine, on the other hand, took $800 out of my pocket last year that I now have back thanks to the Affordable Care Act's medical loss ratio provision. That said, if you feel you're paying too much for health insurance, I strongly suggest you shop around as I did, preferrably with an independent agent. It may surprise you how much you can save with a little effort. Good luck!