Millions in Rebates Doled Out to Insured Texans, Thanks to “The Affordable Care Act” or “Obamacare”

July 26, 2012 | By
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photo illustration by: Todd Wiseman

Millions in rebates doled out to insured Texans, to “The Affordable Care Act” or as some would call it “Obamacare”.

As if perfectly cued to election season, multimillion-dollar rebates are being doled out across America by insurance companies thanks to a new rule in the federal Affordable Care Act, or ACA. Although the much-maligned “Obamacare” remains a prime target for Texas Republicans on the campaign trail, Democrats and other political consultants say the tangible benefits of the ACA now taking effect could change voters’ perspectives on President Obama’s signature legislative package.

“The hardest part politically for ACA has always been that it will take a while for the program to kick in and even longer for people to realize benefits,” Mark McKinnon, a political consultant and former media strategist for George W. Bush, said in an email. “These rebates will be a welcome surprise to a lot of consumers and help reduce angst about ACA.”

The federal government estimated that Texas policyholders could expect nearly $476 million in rebates over the next three years, based on 2010 insurance data. Consumers Union estimates that Texas will receive the most rebates of any state: $166.9 million in 2011, which includes $134 million to individual policyholders, $18 million to large employer policyholders and $14 million to small-employer policyholders.

“There are bigger insurance markets, but we just don’t have that kind of oversight at the state level that would prevent people from overpaying,” said Stacey Pogue, a senior analyst at the left-leaning Center for Public Policy Priorities. “Now we have some kind of oversight at the federal level that will help people get more value.”

The “medical loss ratio,” or MLR, rule in the ACA requires health insurance companies to devote 80 percent of premiums from individual and small-employer plans and 85 percent of premiums from large-employer plans directly to health care services or efforts to improve health care quality. Spending on overhead costs — such as administration, executive bonuses or profits — that exceeds the MLR ratio must be rebated to the consumer by the end of the fiscal year.

Read the whole story: TexasTribune


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