Newspaper article Pittsburgh Post-Gazette (Pittsburgh, PA)

Health Care Law to Yield Rebates

Newspaper article Pittsburgh Post-Gazette (Pittsburgh, PA)

Health Care Law to Yield Rebates

Article excerpt

WASHINGTON -- More than 3 million health insurance policyholders and thousands of employers will share $1.3 billion in rebates this year, thanks to President Barack Obama's health care law, a nonpartisan research group said Thursday.

The rebates should average $127 for the people who get them, and Democrats are hoping that they'll send an election-year message that Mr. Obama's much-criticized health care overhaul is starting to pay dividends for consumers. The law's critics call that wishful thinking.

The law requires insurance firms to spend at least 80 percent of the premiums they collect on medical care and quality improvement or return the difference to consumers and employers. Although many large employer plans already meet that standard, it's the first time the government has imposed such a requirement on the entire health insurance industry.

"This is one of the most tangible benefits of the health reform law that consumers will have seen to date," said Larry Levitt, an expert on private insurance with the Kaiser Family Foundation, which analyzed industry filings with state health insurance commissioners to produce its report. Kaiser is a nonpartisan information clearinghouse on the nation's health care system.

Still, with employer coverage averaging about $5,400 a year for an individual, or $15,100 for a family, $127 isn't a whole lot of money.And the insurance industry says consumers should take little comfort from the rebates because premiums are likely to go up overall as a result of new benefits and other requirements of the law.

"The net of all the requirements will be an increase in costs for consumers," said Robert Zirkelbach, spokesman for America's Health Insurance Plans, the main industry trade group. "Given that health care costs are inherently unpredictable, it's not surprising that some plans will be paying rebates to policyholders in certain markets," he added.

But the Kaiser report said the rebate requirement may be acting as a brake on the industry, discouraging insurers from seeking big premium increases to avoid having to issue refunds later and face possible criticism. …

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