Obamacare rebates will refund insurance premiums for over 8.5 million Americans this summer.
As previously reported by The Inquisitr, the number of Obamacare rebates were previously estimated to affect 12.8 million Americans, but that number apparently has been revised down.
The Obamacare rebates are part of the Affordable Care Act’s 80/20 rule, which puts into place a medical loss ratio that requires insurance companies to keep no more than 20 percent of insurance premiums for business costs and profit. For example, this writer just received an Obamacare rebate check for $86. My insurance company did not spend 26.5 percent of health insurance premiums on its members, so 6.5 percent of all that money was being returned to us as a refund.
Insurance companies are “terrified” of Obamacare rebates and the 80/20 rule. The 80/20 rule puts an artificial cap on potential profits for any given year. Besides medical costs, the Affordable Care Act allows them to spend 80 percent of all income on “quality improvement activity.” But insurance companies are unsure what items the government might decide would fall under their guidelines. They are also concerned about the potential of having several bad years in a row where all medical costs exceed their income after administrative costs. Obamacare’s 80/20 rule limits insurance companies profits and thus it’s more difficult to save money for when times are bad.
The 5.7 million Americans who receive health insurance through an employer in the small-group or large-group markets will not receive Obamacare rebates at all. It’s possible some large-group insurers may allow for “more generous benefits” or a reduction in future premiums since they are required to spend 85 percent on medical payments and improvements.
President Obama gave a speech that highlight the estimated $500 million that will return to Americans as Obamacare rebates. The average American family is expected to receive around $100 back in refunds. But if your insurance company happened to spend more than 80 percent on its members this year then you will not receive an Obamacare rebate.
Do the Obamacare rebates change your mind about the Affordable Care Act?