Skip to content

Health Insurance Companies Required to Pay $1 Billion to Insurers

by on June 27, 2012

By Samantha Savory

As a result of the 2010 health care reform law, commonly referred to “Obama Care,” 12.8 million Americans are getting an average of $151 per family in the form of a rebate check. The federal government’s Department of Health and Human Services (HHS) announced this news this past Thursday, June 21. Why all of sudden are free checks being handed out to Americans, you ask?

Let’s dig deeper.

As a provision in the health care reform law that passed in 2010, health insurance companies are required to spend 80% to 85% of the premiums they collect on medical care. Well, fast forward two years later, and guess what? They didn’t follow through with that law.  Instead, they kept those funds and put it toward their profits and overhead costs.

According to CNN Money, health insurers that didn’t increase that allowance to the 80 to 85% required margin would have to give insurers a rebate for the difference by no later than Aug. 1.

With less than two months away from that deadline, nearly 12.8 million Americans should be looking out for a check in the mail from their insurance company.  If you receive health insurance through your employer, email your human resource representative to find out about your rebate check. HHS also said consumers who do not get a check in the mail, may receive the refund in a lump-sum reimbursement to the same account that they used to pay their original health insurance premium via credit card or debit card. Finally, some insurance companies may provide the rebate in the form of a reduction in their future premiums.

I know, it sounds too good to be true, but it’s just another benefiting element to President Obama’s health care law and another step to forcing major health care providers to be fair with their customers. The HHS Secretary Kathleen Sebelius said in a statement that “this rule helps ensure consumers get fair value for their health care dollar.”

Regardless of your political views, most critics seem to agree with the Secretary’s statement that all service providers, including huge health insurance companies, should be fair with their client base. In addition to this new incentive, the Obama health care bill has allowed 3.1 million young adults access to health care coverage through their parent’s plans thanks to another provision in the 2010 health care reform law. The provision allows parents to add dependents up to age 26 to their insurance plans.

Start managing your finances easier on the go with PowerWallet, a free online money management tool. Visit www.powerwallet.com today to sign up for free!

Advertisements

From → Living Well

Leave a Comment

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s

%d bloggers like this: