The check is in the mail, almost, or maybe it's a credit. In any case, 1.3 million Floridians can expect a rebate from their health-insurance company this summer, according to a report released Thursday from the Department of Health and Human Services.
In all, health-insurance plans will pay out $124 million in rebates to 736,000 Florida households by Aug. 1. The refund, which averages $168, comes courtesy of the health-care overhaul that took effect last year.
The total rebate due Florida residents is the second highest in the country, bested only by Texas, where consumers and businesses can expect $167 million in rebates, according to the report's state-by-state breakdown.
Nationwide, insurance companies owe $1.1 billion in rebates to 12.8 million Americans. The report's figures were lower than a preliminary report released in April by the Kaiser Family Foundation, which projected insurance companies would owe $1.3 billion, and that $1.75 million of that would go to Floridians.
The reason for the rebate lies in the part of the health-care overhaul that requires insurance companies to spend at least 80 percent of their premium dollars on patients, and no more than 20 percent on overhead, such as salaries and advertising. A company that spends too little on patients must refund the difference. The rebates are based on last year's premiums.
"The 80/20 rule helps ensure consumers get fair value for their health-care dollar," said Health and Human Services Secretary Kathleen Sebelius. "Some insurance companies spent as little as 60 percent of premium dollars on consumers at a time when insurance companies saw record profits while consumers saw record premiums. This is about holding insurance companies accountable."
Two-thirds of insurance companies were in compliance with the new requirements, and the remaining third owe rebates, according to the report.
Still, some in the insurance industry believe the rule will do more harm than good. "The requirement does nothing to address the real issues that are driving up health-care costs in this country," said Robert Zirkelbach, spokesman for America's Health Insurance Plans, a membership organization for insurance companies.
"Imposing an arbitrary cap on health plans' administrative costs will have unintended consequences that will outweigh any benefits," he said. "It will paralyze plans from investing in programs that could lower costs, including programs to prevent fraud and abuse, or that give patients online access to tools they need to make more informed decisions."
To get their rebates, consumers don't have to do anything. Those who pay for their own individual health plans directly, and whose plan owes a rebate, will receive it either as a check or as a credit against future premiums.
For consumers who receive insurance coverage through their employers, their business will determine how to apply the rebate. It may come as a reduced premium or as a health benefit, such as a wellness day. Either way, insurance companies and employers must let consumers know how much they're due and how they will receive that value.
The U.S. Supreme Courtdecision as to whether all, some or none of the health-care overhaul will be upheld is expected this month and could affect the future of the 80/20 rule.
In a news conference Wednesday, Gov. Rick Scott said he was "optimistic" that the high court would overturn the law or that Congress would repeal it. If that happens, Scott said he would not be in favor of continuing this part of the law in Florida.
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