Home > Health Insurance Company: Fraud, Denials and Other Issues > Humana to Pay $5.1 Million in Rebates for Violating Medical Loss Ratio

Humana to Pay $5.1 Million in Rebates for Violating Medical Loss Ratio

Humana sent this blogger a personal letter today stating that it has violated the Medical Loss Ratio rule of the affordable care act. Under this rule, insurance companies are required to pay a rebate back to their policy holders if 80% of their premium dollars is not spent on medical care.

I live in Tennessee. Humana premiums totaled $30,623,077 and only spent $19,353,784 Million  (63.2%)  when it should have spent $24,498,461 (80%) on medical care. Humana used the extra money for “administrative costs” (i.e. profits for shareholders, executive compensation packages) and it thus missed the MLR by 16.8%. Humana is rebating 16.8% back to policy holders which totals $5,144,676 Million.

If you live In Tennessee and are a Humana policy holder, make sure you check your mailbox. If you wish to opine, please hit the Leave A Comment button.

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  1. August 18, 2012 at 11:24 pm

    Perhaps Humana could take the penalty out of the CEOs salary ($15M over past 5 years). See http://www.forbes.com/lists/2006/12/AG0Q.html

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