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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
Deb
August 12, 2012 at 12:00 pm

ok, since this is the first I have heard of this, and if it looked like junk mail... my question is, DOES ANYONE HAVE A PICTURE OF WHAT THE ENVELOPE LOOKED LIKE? and/or have all the rebates been sent out already?

Tammy
August 12, 2012 at 11:37 am

Blue Cross Blue Shield more than like ly no it is a huge insurance company and what I read they will lower premiums and maybe the copay.

Tammy
August 12, 2012 at 11:32 am

Hey guys I did some research for you. Only people that have a small business that have their own insurance will get a refund of about $800.00 everyone else who works with small companies the money will get distributed to smaller copays,and etc..you more than likely will not see a fefund. The same with the people who work with the bigger companies. I hope this helps.

Jay MacDonald
August 12, 2012 at 10:28 am

Hi, Dennis: Yes, 2011 was the first year for MLR rebates. From now on, each August will be the deadline for the previous year's policies.

Jay MacDonald
August 12, 2012 at 10:27 am

Hi, Tom: The link is correct. You need to put in either your state, which will bring up a list of insurers, or your health insurance company. Once you reach your insurer's page, there are three tabs at the top: Overview, Medical Loss Ratio (MLR) and Rate Review. Select the MLR tab to see if your company in your state must issue a rebate and if so, the average rebate per subscriber. Good luck.

Dan
August 12, 2012 at 8:49 am

Jay,it's frightening that you didn't realize that ANY company forced to expend over 80% of it's revenue, before addressing it's
operating overhead, is going to fail.....quaranteed! The laughingly titled Affordable Care Act, was purposely designed to
ensure that the last man standing would be the only entity that
routinely operates at a loss......Big Brother. It would have been incredibly less expensive to cover the uninsured with direct premium payouts vs. a total upheaval of the entire healthcare system. This isn't a revelation to the perpetraitors
of this legislation, which begs the question, what is the REAL
objective here.

nina
August 12, 2012 at 8:43 am

i had healthy kids silver will i be getting a rebate check?

Thomas Pallam
August 12, 2012 at 7:43 am

So much of big talk, but the end game is penuts.

joseph Piotte
August 12, 2012 at 7:01 am

inquiring about Blue Cross Blue Shield in Massachusette
Are we emtitled to any rebates
thank you

robin
August 12, 2012 at 2:48 am

I work for Kaiser. I pay a premium to Kaiser. Will I get a refund?