Insurance plans owe consumers, businesses $1.1 billion under ACA rule

The federal government announced this week that consumers and businesses are to receive $1.1 billion in rebates this summer under a provision of the ACA that requires insurance companies to spend at least 80 percent of subscriber premiums on health-care claims and quality-improvement initiatives (Source: “Health-insurance plans owe $1.1B,” Washington Post via Columbus Dispatch, June 21, 2012).

However, if the Supreme Court rules next week that the ACA is unconsititional, legal experts say the rebates may never be issued.

“If (the Supreme Court) says the law is unconstitutional, insurers couldn’t be forced to pay rebates based on unconstitutional laws,” said Tim Jost, a law professor at Washington and Lee University.

According to an Obama administration report, 12.8 million Americans are set to receive a rebate this year, with an average value of $151 per household. The “medical loss ratio” requirement went into effect on Jan. 1, 2011.