Health-care insurance consumers to get $330 million in rebates under ACA’s 80-20 rule

Remember the 80-20 rule (also known as the medical loss ratio rule)? That's the Affordable Care Act rule that generally requires health insurers to spend 80% or more on hospitals, docs, prescription drugs, and the like (that is, actual health care) — and not administrative expenses and advertising. The idea is to encourage insurers to trim administrative blubber. If insurers don't comply with the rule within any calendar year, they are required by August 1 of the next year to send rebates to consumers (or, in some cases, to employers who provide health insurance). We've talked about the issue before. Go here, for the Department of Health and Human Services's explanation of the 80-20 rule.

As explained in this article by Jack Torrey, this August, rebates will total about $330 million. That comes out to a small amount per eligible consumer. (Torrey points out that, in Ohio, the average rebate comes to just $69.) In previous years, the aggregate rebate was considerably larger. That may mean that the 80/20 rule is working. That is, the rule is producing fewer (and smaller) rebates because insurers generally are complying with the rule and running their businesses with less administrative waste.

For other stories on the rebates in various states, go here, here, here, and here.


Leave a Reply

Your email address will not be published. Required fields are marked *