Not Everyone Gets Obamacare Rebates


WASHINGTON (UPI) — Don’t hold your breath waiting for a rebate from a U.S. insurance company, a law professor advised.

The new healthcare act requires insurance companies with high administrative costs — those deemed not paying out enough in insurance benefits — return money in one of a variety of forms to their customers.

Some companies are sending rebates. Cash in hand is a clear selling point for the law, The New York Times reported Monday.

But it doesn’t mean a check is on the way.

“I’ve been trying to explain that to people — that very few people would be getting a check,” Timothy Jost, a professor at Washington and Lee University, told the Times.

The Department of Health and Human Services said insurance companies would return $1.1 billion to customers in 2012.

In Vermont, the average rebate check is expected to be $807 per family. In Alaska it will be $622 per family; in Alabama, $518.

Two states, New Mexico and Rhode Island do not have insurance companies that return too little to consumers, as defined by the law, so there will be no checks sent in those states.

The cap for companies has been set at 80 percent. Companies returning less than 80 percent to consumers in the form of insurance benefits need to pay down to that level. For companies that handle large employers, insurance companies must pay 85 percent back to consumers in the form of benefits.

There are 75 million insured customers who could see money returned to them, but only 12.8 million will get rebates in 2012, the Obama administration said.

Companies can also lower their administrative costs-to-payout ratio using other means, such as lowering premiums, the newspaper said.

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