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Alabama Families Receive an Average of $248 in Insurance Rebates

By: News Release
By: News Release

Today, Health and Human Services (HHS) Secretary Kathleen Sebelius announced that 1,487 Alabama residents will benefit from $314,374 in rebates from insurance companies this summer, averaging $248 per family, due to the Affordable Care Act.

Nationwide, 77.8 million consumers saved $3.4 billion up front on their premiums as insurance companies operated more efficiently. Additionally, consumers nationwide will save $500 million in rebates, with 8.5 million enrollees due to receive an average rebate of around $100 per family.

Created under the Affordable Care Act, the Medical Loss Ratio standard, also known as the “80/20 rule”, requires insurers to spend at least 80 cents of every premium dollar on patient care and quality improvement. If they spend an excessive amount on profits and red tape, they owe rebates back for the difference no later than August 1, 2013.
“This new standard is increasing transparency and accountability, promoting better business practices and competition among insurance companies, and ensuring consumers receive value for their premium dollars,” said Secretary Sebelius. “Today’s announcement shows that more Alabamians are benefiting from the tools created under the Affordable Care Act to keep consumer costs down.”

The law has motivated many plans to lower prices or improve their coverage to meet the standard. Other Alabamians will see their value reflected through rebates later this summer.
Alabamians owed a rebate will see their value reflected in one of the following:

• a rebate check in the mail
• a lump-sum reimbursement to the same account that they used to pay the premium if by credit card or debit card
• a reduction in their premiums
• their employer using rebates to improve their health coverage

Insurance companies that do not meet the standard will send consumers a notice informing them of the rule The notice will also let consumers know how much the insurer did or did not spend on patient care or quality improvement, and how much of that difference will be returned as a rebate.


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