Close
Bonneville Phoenix Network
 KTAR News
 Arizona Sports
92.3 FM KTAR
Menu
Social
Latest News
Updated May 27, 2012 - 1:12 pm

Health insurance refunds on the way for Arizonans

PHOENIX Arizona consumers and businesses reportedly can expect to collect more than $36 million in refunds this summer from health- insurance companies under new provisions of the nation's health-care law.

A report from the Washington, D.C.-based Consumers Union shows that people who have purchased individual health-insurance plans will get $24.4 million in refund checks or credits to future premiums.

Insurers also will refund $9.3 million to employers with small-group plans of fewer than 50 people and an additional $2.9 million to companies with larger plans of more than 50 people.

The Affordable Care Act requires health-insurance companies to spend at least 80 percent of premiums on medical care or efforts to improve the quality of health care for consumers and small businesses. For large businesses, that threshold increases to 85 percent spent on medical care or health-quality initiatives.

The new "medical-loss ratio" standards, which took effect Jan. 1, 2011, are meant to provide relief to consumers and businesses and prevent insurance companies from keeping a significant portion of customers' premiums for salaries, brokers' fees, profit and other administrative costs.

The first round of rebates, based on insurers' spending for 2011, must be sent to customers by Aug. 1, according to The Arizona Republic .

Representatives for Consumers Union said the report shows that the health-care law's rules are beginning to pay dividends for consumers both in rebates and lower rate increases.

"The MLR (medical-loss ratio) is starting to work for consumers by holding down those rate hikes and bringing consumers more value for their money," said Sondra Roberto, a Consumers Union staff attorney.

The Consumers Union report showed that Blue Cross Blue Shield of Arizona expects to rebate $8.7 million to more than 77,000 individual policyholders. UnitedHealthcare's Golden Rule Insurance will refund nearly $8.7 million to more than 30,000 policyholders. Aetna Life, Mega and Humana also expect to refund consumers.

Small businesses can expect some relief, with Blue Cross Blue Shield anticipating refunds of about $3.2 million to more than 3,700 small businesses. Humana, Aetna and Trustmark Life Insurance Co. each expect to refund at least $1 million to small-group plans.

Blue Cross Blue Shield representatives said the Consumers Union's report accurately reflects its anticipated rebates to policyholders. Blue Cross Blue Shield, Arizona's largest health insurer as measured by premiums, paid $2.8 billion in medical claims last year.

The Consumers Union report suggested that the medical-loss ratio requirements are moderating rate increases.

It said Blue Cross Blue Shield of Arizona sought rate changes last year that ranged from a 3 percent increase to a 2.9 percent decrease. But Blue Cross Blue Shield officials said the company's rate increases reflected a downward trend in customers' use of medical services and likely was an outgrowth of the economy.

Copyright 2012 The Associated Press.

World Class Arizona

  • APSWorld Class Arizona with Arizona's largest and longest-serving electricity utility. APS serves more than 1.2 million customers in 11 of the state's 15 counties.

Voice For A Better Arizona

Comments

comments powered by Disqus
Latest News