Case Management

News: Health insurance rebates to total $1 billion

Case Management Weekly, July 25, 2012

Approximately 12.8 million Americans will receive $1.1 billion in rebates from insurance companies this summer, because of the Patient Protection and Affordable Care Act’s 80/20 rule, the U.S. Department of Health and Human Services (HHS) announced recently.  

The average rebate for each family with a health insurance policy will be $151, HHS said in a recent press release

The law generally requires insurance companies to spend at least 80% of consumers’ premiums on medical care and quality improvement. Insurers may allocate the remaining 20% for 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 fail to meet the 80/20 standard must provide policyholders a rebate for the difference no later than August 1. 

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