Kaiser: ACA’s MLR provision leads to $1.3 billion in rebates

In the first year in which health plans were required under the ACA to spend at least 80 percent of premiums on medical care and quality improvement, more than 3 million health-insurance policyholders and thousands of employers are expected to share $1.3 billion in rebates (Source: “Health insurers owe $1.3B in rebates,” Associated Press via Columbus Dispatch, April 27, 2012).

Analysis by the Kaiser Family Foundation (pdf, 8 pages) found that the average rebate will be $127.

“This is one of the most-tangible benefits of the health-reform law that consumers will have seen to date,” said Larry Levitt, an expert on private insurance with the Kaiser, which analyzed industry filings with state health-insurance commissioners to produce its report.

However, insurance industry officials say the medical loss ratio (MLR) requirements will simply lead to higher overall cost for coverage.

“The net of all the requirements will be an increase in costs for consumers,” said Robert Zirkelbach, spokesman for America’s Health Insurance Plans, the main industry trade group.