I received my rebate last week. You may have gotten yours too – if your medical insurer ‘made too much money.’
In fact, if you pay for your own health insurance either because you are self employed or have individual coverage, the likelihood that you will receive a rebate of your premiums is high.
If your health insurance coverage is provided by your employer, the employer gets the rebate and you may or may not share in the rebate. Of course, if you don’t contribute to your coverage, you won’t get any rebate.
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Part of the new health care law states that health insurers must use at least 80% of premiums collected to pay directly for health care benefits. That means 20% or less can be used for profits and administrative expenses not related to health care. So, if your health insurance company spends 75% on health care benefits, then they have to rebate the 5% back to the premium payers.
The U. S. Government estimates that companies, including United Health Group and WellPoint (including Anthem BCBS of MO) will pay a total of $1.1 billion in rebates on 2011 policies.
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Even if you don’t like the new health care laws (if you understand them) this seems to be a good thing for all of us. It also seems that this will have an effect on future rate increases that are not a direct result of increasing health care expenses. I don’t mind getting a check in the mail from my insurance company, you shouldn’t either.
By: Joe Arndt Pres. Arndt & Associates Financial Services. 8124 Big Bend Blvd. St. Louis, MO 63119 314-968-5467