Nearly $1 million in insurance refunds coming to W.Va.
CHARLESTON, W.Va. — More than $900,000 in refunds from insurance companies are headed to 8,300 people in West Virginia.
Health and Human Services Secretary Sylvia M. Burwell announced the payments Thursday, crediting the Affordable Care Act, and said the refunds in West Virginia will average $177 per family.
The payments are being made under the medical loss ratio requirement of the act, also called the 80/20 rule, a provision that requires insurers to make the refunds if they fail to spend at least 80 percent of the premiums they collect from customers in the individual- and small-group markets on medical care or activities that improve health-care quality. That ratio jumps to 85 percent in the large-group market, and companies that do not meet the standard are required to offer customers a rebate for the difference.
Sen. Jay Rockefeller, D-W.Va., who as chairman of the Senate Commerce, Science and Transportation Committee, spearheaded the inclusion of the 80/20 Rule in the ACA, said the rule, which went into effect in 2011, has allowed for more transparency for the health insurance marketplace.
“Once again, it’s very clear from today’s announcement on the medical loss ratio that this pro-consumer piece of the health-care law is working for consumers,” Rockefeller said. “Because we fought so hard to make this provision part of health reform, we now have an industry that has become more efficient and transparent, and refocused its attention so consumers are prioritized over shareholders. And the billions of dollars the medical loss ratio has saved consumers is proof that subscribers are getting the value they deserve for their premium dollars.”
The six insurers in West Virginia subject to the rebates are Time Insurance, Golden Rule Insurance, John Alden Life Insurance, MEGA Life and Health Insurance, Trustmark Life Insurance and United Healthcare Insurance.
Time Insurance accounts for the largest chunk of the refund, owing $486,357 to consumers in its individual-group market. John Alden Life Insurance has the second largest rebate amount to issue; it owes $58,456 to its individual-market consumers and $115,336 to its small-group customers.
In the first three years of the medical loss ratio program, individual and employer-plan enrollees have received or will receive $1.9 billion in refunds, according to the HHS. The 2013 refunds will amount to $330 million for 6.8 million consumers across the nation — an average of $80 per family.
“The simple fact that refunds are being issued is more proof that the ACA,with all of its warts, is working,” said Brandon Merritt, health policy analyst for the West Virginia Center on Budget and Policy. “There are over 8,000 West Virginia families that will be getting money back this year because their health insurer spent too much on administration and executive salaries and not enough on paying for actual health care of its customers. This is money that, in the recent past, would have gone straight to the pockets of the insurance companies.”
People entitled to a refund will get the money through a check in the mail or in a reduction in future premiums, among other ways.
The Associated Press contributed to this report.
Reach Lydia Nuzum at email@example.com, 304-348-5189 or follow @lydianuzum on Twitter.