Americans will be refunded part of their health insurance premiums totaling $1 billion: who will get how much
Private health insurers are expected to pay out $1 billion in refunds as early as this fall, according to a Kaiser Family Foundation analysis released June 1. Writes about it CNN.
The amount of the refund stems from a provision in the Affordable Care Act that requires insurers to spend the majority of payments on health care. The amount is based on insurers' data for the previous three years.
This year's estimated return is about half of last year's $2 billion. Insurers increased premiums for Affordable Care Act plans in 2018.
In addition, individual market insurers are likely to have been less profitable in 2021, which reduces the amount of compensation they can pay out.
But this year's total payouts still reflect the impact of the COVID-19 pandemic, which has prompted service providers to cancel elective procedures and Americans to forego treatment in 2020, leading to sharp cuts in medical services and insurance payments.
About 4,3 million people in the individual market are expected to receive a total of $603 million in refunds this fall. That is, about 1,8 million consumers in the small employer market will receive $275 million, and 2,2 million people in the large employer market will receive $168 million.
This means that the average return is $141 for those in the individual market, $155 for the small employer market, and $78 for the large employer market.
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Not all people are eligible for refunds. Those with private insurance receive a refund in the form of a check or premium, while those with insurance plans from an employer usually share the refund with their employers.
The Affordable Care Act requires insurers to spend at least 80% of their premium income (85% for large employer plans) on health care payments or quality of care expenses.
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