Home > Health Insurance Company: Fraud, Denials and Other Issues > Health Insurance Companies to Pay $1.3 Billion in Rebates for Violating Medical Loss Ratio Rule

Health Insurance Companies to Pay $1.3 Billion in Rebates for Violating Medical Loss Ratio Rule

There is finally some good news coming out of the ACA in regards to the fact that the Medical Loss Ratio is in full effect. Under this rule, large plan insurers (Humana, United, BCBS, etc) must PAY 85% of premiums towards providing actual medical care(not profits). In addition, small plans must PAY 80% of premiums towards providing actual medical care as well. These money-loving insurers should thank God that this rule was not in place back in 2010 because if it had been, they would have had to cough up $2,000,000,000 for violating the rule (Source 1). According to a report done by the Commonwealth Fund, Individual market insurance companies in Texas and Florida would have had to pay rebates back to consumers totaling $281,000,000. Large group Insurers in Maryland and Florida would have had to pay $40,000,000 in rebates back to consumers (Source 1).

Insurers are already off to a brilliant start this year at violating the MLR. The National Journal reports that Insurers could cough up $1,300,000,000 in rebates by the end of the year. This will account for $426,000,000 in rebates to the individual plan market and $541,000,000 to the large group plan market (Source 2).  An estimated 4,900,000 in the individual market  will be getting rebates this year totaling $377,000,000. Alaska, Alabama, Oregon, Louisiana, and Massachusetts are expected to receive an average of $256.50 per enrollee. An estimated 7,500,000 in the large group market will be getting rebates this year totaling $541,000,000. Vermont, Nebraska, Minnesota, New York, and North Carolina are expected to receive an average of $208.60 per enrollee (Source 3). If the MLR had been in effect in 2010, the total amount in rebates that could have been paid out by the end of this year could have totaled $3,300,000,000.
The following insurers (so far) have had to pay out rebates back to consumers for violating the MLR rule.
———————–
Aetna
$11,495,614     – November 2011 (Source 6)
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Blue Cross Blue Shield
$82,507,470       – November 2011       (Source 6)
$283,000,000  – October 2011            (Source 5)
$167,000,000  – September 2011        (Source 4)
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CD PHP
$487,768    – November 2011 (Source 6)
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ConnectiCare
$15,462      – November 2011 (Source 6)
—————————————————–
Group Health
$4,168,935   – November 2011  (Source 6)
—————————————————–
Health Net
$5,052,467    – November 2011 (Source 6)
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Health Now
$4,492,327   – November 2011 (Source 6)
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HIP Health Plan
$182,194    – November 2011  (Source 6)
——————————————————
Humana
$5,144,676  – November 2011
—————————————
MVP
$1,319,640
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United Healthcare
$4,838,675  – November 2011 (Source 6)
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Keywords: health care, affordable health insurance, medical loss ratio, insurance rebate, blue cross blue shield, united healthcare, health care reform
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