Your health insurance provider may owe you a rebate

HOUSTON - You may be getting a rebate check from your health insurance company or they may be cutting your premiums.

Nearly 8 million policyholders are expected to get part of $2.7 billion in rebates from various health insurers, according to the Kaiser Family Foundation.

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This will particularly help low-income families with insurance purchased through state or federal exchanges.

"These standards apply to all private insurance, so small employers that buy a policy through the exchange or directly from an insurer could also get these rebates if the insurer didn't meet the efficiency standards.  So could large employers.  

But most of the rebates get paid to people who buy coverage on their own," said Karen Pollitz, Senior Fellow at the Kaiser Family Foundation.

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The Affordable Care Act requires these health insurance providers to spend 80% on your health care and only 20% on administration and profits.  It's called the Medical Loss Ratio.

"If they're more profitable or less efficient than that, they have to pay rebates to the consumer.  Rebates kind of lag, so these fall rebates are being paid on last year's profitability.  And actually, it's a three-year rolling average," explained Pollitz.

So how much could you get?  Pollitz says about the same amount you might have received last year. "Last year the average rebate paid to people who bought their own policy was about $123. It would be twice that if you were a couple buying a policy together," she said.

The rebates will come in the form of checks or reduced premiums.  Some insurers may have reduced their premiums already or waived some co-pays or deductibles.  But you may get an even bigger rebate next year.

"There's a lot of care being provided for people who come down with COVID-19.  But at the same time patients had been putting off their elective services to stay out of the hospital and avoid exposure.  That made insurers even more profitable," said Pollitz.

But these rebates may not last forever.  The Supreme Court will hear a case soon that could overturn the Affordable Care Act, which would end the rebates.

If you have not received a rebate by the end of October, Pollitz suggests asking your insurer if you'll be getting one and when.

These rebates do not apply to companies that self-insure or to Medicare or Medicaid.