“trying to save lives and help individuals is controlled by an individual that made $8 million last year. And he’s not a phy- sician. He’s directing health care. He’s some great entrepreneur that’s going to change the world in technology, and he doesn’t have time to talk to physicians.”
That was the finding of a Common-
wealth Fund study published in April that said consumers nationally would have received rebates of nearly $2 bil- lion if the cap on insurance profits and overhead had been in place in 2010. Health plans will have to issue rebate checks this year based on their so-called medical loss ratio in 2011. A Commonwealth Fund spokesperson
Study: 2010 rebates would have topped $2 billion
Texas health insurance customers would have received $255 million in rebates had a provision of the Patient Protection and Affordable Care Act (PPACA) regu- lating how much insurance companies can spend on profit and overhead been in effect.
said the study shows insurers have been spending more on administrative costs than what the health law will allow. Texas Medical Association officials speculate that actual rebates paid later this year could be much smaller than those that would have occurred in 2010 because health plans have had two years to alter their business practices. PPACA requires plans to spend at
least 80 percent or 85 percent of their revenues on actual health care services and quality improvement efforts, de- pending on whether the plan is a large
group, small group, or individual plan. The rules for the medical loss ratio
took effect for 2011, with rebate checks of an undetermined amount scheduled to be distributed in August. If the cap had been in place for 2010,
nearly a fourth of privately insured con- sumers would have received rebates, the study said. More than half of those with individual coverage would have pock- eted refunds. Rebates would typically have been $100 to $300 per member. Texas insurance customers collective-
ly would have received the most in re- bates, followed by those in Florida, who would have gotten $202 million. One- fifth of nonprofit insurers would have owed rebates. Among for-profit plans, 70 percent would have been required to send rebate checks, said the study. n
Ken Ortolon is senior editor of Texas Medicine. You can reach him by telephone at (800) 880-1300, ext. 1392, or (512) 370-1392; by fax at (512) 370-1629; or by email at
ken.ortolon@texmed.org.
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June 2012 TEXAS MEDICINE 41
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