Based on the preliminary estimates from insurers, rebates would total $1.3 billion this year, including $426 million in the individual market, $377 million in the small group market, and $541 million in the large group market.This comes from something called the Medical Loss Ratio requirement: the requirement in the Affordable Care Act that insurance companies must spend at least 80% of premiums in individual and small group markets - 85% in large group markets - to actually provide health care. If they don't, they must issue refunds to their subscribers to make up for the extra amount they took in. That requirement went into effect in 2011, and the first checks are due to be issued by this August.
In the small group market, rebates will issue for nearly 5 million enrollees, and in the large group market, 7.5 million. In the individual market, this translates to an average rebate of $127 will go to 3.4 million people. - that is, nearly a third of the people in the individual market will get a check from their insurance company.
This is also not the only money consumers are saving. The Kaiser report notes that the MLR requirements also kept rates lower than they would otherwise be in the first place.
All this didn't just happen on automatic pilot, I might note. Not only is the Affordable Care Act the most pro-consumer health care law since Medicare, its implementation by the Obama administration has been stellar. We noted the administration's steadfast stand against insurance company tricks trying to get everything and its mother under "medical loss," and we previewed this rule's effectiveness just as it was going into effect.
This is a significant part of what health reform was about. The right wing likes to talk about "market-based" solutions for health reform; well, this is one of them. This is a reform where consumers have a right to demand that insurance companies spend our premium dollars on what it was intended for - to provide health care services - rather than to pay for hiring "analysts" whose only job is to figure out how to kick sick people off of their plans, how to avoid paying for proper treatment if it got 'too expensive', and how to sacrifice health care at the alter of profit. The President and the Democrats came up with the novel concept that insurance companies should actually spend money providing health care, and they got pummeled for it by the right wing whackjobs and insurance company lobbyists. But the president got it done.
This is why we fought for it - against not just a determined and vicious right wing smear campaign, but also against a ideological war from the so-called "Left." We fought because health insurance companies were ripping off their customers, and there needed to be a check on that. We fought so that more people could get coverage. We fought so that less people would die. We fought so more people could afford health insurance. We fought so there's an extra $127 in your pocket this year.
Health care reform works. Thank you for getting it done, Mr. President.