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Another way Obamacare is helping Texas right now

Insurance rebates.

Texas consumers and businesses are poised to receive an estimated $186 million in rebates from health insurers under a requirement of the Affordable Care Act, according a study released today by the Kaiser Family Foundation.

The health care act’s medical loss ratio provision requires insurers to issue rebates if their total administrative expenses and profits are relatively higher than those permitted under the act. The Kaiser study estimates that 92 percent of Texas consumers in the individual insurance market will receive rebates, the highest figure for any state in the country.

The provision, which went into effect in January 2011, requires that insurance companies covering individuals and small businesses spend at least 80 percent to 85 percent of insurance premium dollars on health care and improving care quality. The provision is designed to curb spending on administration costs and profit. When insurers don’t meet the 80/20 ratio, they are required to distribute rebates, as they will be doing come August. The Kaiser Family Foundation estimates those rebates based on 2011 data will total $1.3 billion nationally.

Sarah Kliff has more on this. I propose that if SCOTUS does strike down Obamacare that Greg Abbott and all of the other Attorneys General who litigated against it be required to cover the cost of the lost refund to consumers. Who’s with me?

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4 Comments

  1. Eileen says:

    Wow, I had not even realized that provision was in there. (Also, can we call it by the real name, “Affordable Care Act?”)

    When I was at Rice, I was fighting with the administration over our dismal medical loss ratio – it was at 40% (the previous year, a shocking 36%). Of course they didn’t care to do anything about it, since who cares about grad students anyway. Nice to see that the ACA is looking out for us. I’m sure Rice will just return the millions Aetna will owe them – wouldn’t want to upset our dear friends in high places or anything…

  2. Eileen – The Obama campaign has embraced the term “Obamacare”.

    http://2012.talkingpointsmemo.com/2012/03/ninja-move-obama-campaign-accepts-obamacare.php

    I’m in good company. 🙂

  3. Ross says:

    Kuff, are you saying that if the law is declared unconstitutional, then the folks who litigated ought to pay the money some other folks might have received? That’s pretty asinine, don’t you think? And a good example of how the “progressives” are driven by an end justifies the means methodology of shortcuts, rather than actually passing laws that meet the requirements specified in the Constitution.

    Obamacare is a monster, and one of the worst pieces of legislation ever passed in terms of obtuseness. Even your leadership didn’t know what was written, preferring to “pass something”, and figure out what it means later.

    I am also concerned that you think it’s OK to tell a private business how much money they can make. Wouldn’t it be far better to require full disclosure, and let consumers make their own choices? Why do you think government is better at choosing for me than I am? having said that, I would be supportive of forcing insurance companies to convert to the mutual model, eliminating the drivers that make them choose shareholder interests over customer interests.

  4. Eileen says:

    Ross,

    You will find many liberals (like me) who are deeply uncomfortable with the system we have. In that sense, the ACA is simply a really complicated bandaid on a gushing wound, and I can see where you want to throw up your hands and say this is stupid for some provisions.

    But, it was this, or nothing. The republicans made it clear what they would do as an alternative: nothing. So while I’d love single-payer, I’ll support ACA until we get it.