Insurance rebates headed to S. Dakota this summer

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Health and Human Services Secretary Kathleen Sebelius announced this week that 1,400 South Dakota residents will benefit from $47,900 in rebates from insurance companies this summer, because of the Affordable Care Act’s 80/20 rule.

The rebates will average $68 for the 700 South Dakota families covered by a policy.

The health care law generally requires insurance companies to spend at least 80 percent of consumers’ premium dollars on medical care and quality improvement. Insurers can spend the remaining 20 percent on administrative costs, such as salaries, sales and advertising.

Beginning this year, insurers must notify customers how much of their premiums have been spent on medical care and quality improvement.

Insurance companies that do not meet the 80/20 standard are required to provide their customers a rebate for the difference no later than Aug. 1. The 80/20 rule is also known as the Medical Loss Ratio (MLR) standard.

“The 80/20 rule helps ensure consumers get fair value for their health care dollar,” Sebelius said.

South Dakotans owed a rebate will see their value reflected in one of the following ways:

• a rebate check in the mail;

• a lump-sum reimbursement to the same account that is used to pay the premium if by credit card or debit card;

• a reduction in their future premiums; or

• their employer providing one of the above, or applying the rebate in a manner that benefits its employees.

For the first time, all of this information will be publicly posted on HealthCare.gov this summer, allowing consumers to learn what value they’re getting for their premium dollars in their health plan.

Tags: news, updates, insurance, obamacare, rebates, state, premiums