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ACA rebate checks coming

nine9s

Senior member
May 24, 2010
334
0
71
I just got my 2012 health insurance rebate check. It was about 70% of one month's premium. Not too bad and not possible without the Affordable Care Act.
 

EagleKeeper

Discussion Club Moderator<br>Elite Member
Staff member
Oct 30, 2000
42,599
5
0
Yet premiums went up for many as a result.

Good luck next year.
 

cubby1223

Lifer
May 24, 2004
13,525
42
86
Don't worry.

You'll be paying that money back into the system through various taxes :p

But, do make sure to show your thanks with a straight Democrat party line vote in November!
 

corwin

Diamond Member
Jan 13, 2006
8,639
7
81
mine went up and took some things off. bah
+1

Who the hell gets rebates under this bullshit act anyway? People who don't pay for their healthcare anyway? Is it like the good old earned income credit?
 

Zivic

Diamond Member
Nov 25, 2002
3,505
38
91
My rates went up 36%, and I got no rebate. Can't wait to votes Obama back in
 

mshan

Diamond Member
Nov 16, 2004
7,869
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I think it depends upon whether insurer used less than 80% of premiums on actual care (probably in total for all insured, not on individual basis).

Originally, I think it was supposed to be 90% of premiums go to actual medical care, but it got watered down by lobbyists.
 

corwin

Diamond Member
Jan 13, 2006
8,639
7
81
I think it depends upon whether insurer used less than 80% of premiums on actual care (probably in total for all insured, not on individual basis).

Originally, I think it was supposed to be 90% of premiums go to actual medical care, but it got watered down by lobbyists.
Yeah I finally found that, good to know the .gov can legislate how much profit a private company can make....precedent has been set so which company should they go after next?
 

chucky2

Lifer
Dec 9, 1999
10,038
36
86
Er, the Gov is $15T+ in debt, $1T+ or something like that over budget...how exactly is anyone getting rebate anything??? Man I wish I could setup a company to run like the Gov...
 

mshan

Diamond Member
Nov 16, 2004
7,869
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I believe this is essentially a refund, from your insurance company, not the government, because under the new rules, they charged you excess premiums.

Don't see how this particular provision increases government debt because it doesn't have anything to do with bringing currently uninsured into the system.

This provision I think was implemented to gently squeeze excess waste and inefficiency out of insurers actual operations. Watered down by lobbyists from what it should have been (90% ratio, or at least 85%), but it is at least a start in terms of trying to bend the curve in rate of inflation of health care costs.
 

sactoking

Diamond Member
Sep 24, 2007
6,763
1,495
136
I think most people will be sorely disappointed by the MLR rebate provisions; the media hyped it up to be something it most definitely is not. For example, here in Nevada we have ~2.7 million people. Of that number ~550,000 are uninsured. Of the ~2.2 million left, ~1.8 million work for insurers who administer programs of self-insurance for health benefits. Self-insured employers are exempt from the ACA. That means that only ~400,000, or 15% of the state's population even meets the first test for an MLR rebate.

Of those 400,000 people, maybe 40,000 (10%) will get an MLR rebate this year. Yay for helping 1.5% of the population!

If anyone wants some non-biased answers on MLR rebates or other topics I invite you to post questions in the ACA Q&A thread here in P&N.
 

chucky2

Lifer
Dec 9, 1999
10,038
36
86
You're telling me the OP insurance company overcharged him/her by 70%? That's quite a markup over what the insurance companies profit margins have been reported at.

This isn't going to be one of those deals where the insurance company refunds someone like the OP, and then the Gov gives the insurance company money/tax deduction to cover that, is it?
 

mshan

Diamond Member
Nov 16, 2004
7,869
0
71
I don't believe the amount is determined per individual (premiums taken in vs. money spent on health care costs for that particular person)

Probably based upon total premiums insurer took in from all of it's customers vs. how much is paid out in actual medical care costs for all of it's insured, not just individual policy holder. Don't know, however, if there is any relative weighting for each insured based upon how risky they are or not (my guess is not, as goal, like I said above, is just trying to force insurers to run more efficient administrative operations). Sactoking can probably give you a more precise and accurate answer.

Also, OP said 70% of one month's premium, not his total annual premium. In Virginia, I saw previously article that said it would be something like $20.
 
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chucky2

Lifer
Dec 9, 1999
10,038
36
86
It just seems odd that insurance companies that don't have much of a profit margin (the single digit %'s didn't seem excessive to me) are paying out rebates given healthcare costs that are ever increasing. Something does not seem right here...
 

mshan

Diamond Member
Nov 16, 2004
7,869
0
71
I don't have any good links to provide on topic, but you can google for "medical loss ratio" or just go ask in Sactoking's thread as he suggested (I believe he said he is an insurance regulator in California, so is probably quite knowledgeable on the topic):

Sactoking's thread -> http://forums.anandtech.com/showthread.php?t=2255509
 
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Hayabusa Rider

Admin Emeritus & Elite Member
Jan 26, 2000
50,879
4,210
126
You're telling me the OP insurance company overcharged him/her by 70%? That's quite a markup over what the insurance companies profit margins have been reported at.

This isn't going to be one of those deals where the insurance company refunds someone like the OP, and then the Gov gives the insurance company money/tax deduction to cover that, is it?
I think that he means that his total rebate equals 70% of one months premium. Obamacare will increase premiums by it's requirements. "affordable" in this sense is similar to "patriot" in patriot act.
 

sactoking

Diamond Member
Sep 24, 2007
6,763
1,495
136
You're telling me the OP insurance company overcharged him/her by 70%? That's quite a markup over what the insurance companies profit margins have been reported at.

This isn't going to be one of those deals where the insurance company refunds someone like the OP, and then the Gov gives the insurance company money/tax deduction to cover that, is it?
Closer to 5.8% (70%/12). You have to remember that it's not really an "overcharge" in the traditional sense, too.

Insurance premiums for pretty much all personal lines products are prospectively rated, meaning that the rate is sufficient to cover anticipated losses and expenses. Since the MLR can be affected by two broad categories (Medical costs and Management & Operations costs) an MLR rebate may be triggered by lower-than-expected medical costs, higher-than-expected M&O costs, or some combination. If the premium is actuarily sound but the insurer experiences abnormally low medical loss costs, the MLR will trigger a rebate. That's technically an "overcharge" but not really an overcharge.

Then the whole thing gets even more messed up once the risk adjustment subsidy provisions kick in...
 

chucky2

Lifer
Dec 9, 1999
10,038
36
86
So then is this just the insurance company "doing the right thing", or is ACA making them do it? (and I consider making up rules that force them to do it making them do it)
 

chucky2

Lifer
Dec 9, 1999
10,038
36
86
I think that he means that his total rebate equals 70% of one months premium. Obamacare will increase premiums by it's requirements. "affordable" in this sense is similar to "patriot" in patriot act.
After participating and reading sactoking in the excellent thread he started, my understanding is basically the Gov is going to force people to get insurance (stick), but give them a subsidy to do so (carrot). What's odd is, I still don't understand how a Gov that is $15T+ in debt, and $1T or so over budget, finds the money to offer a subsidy for anything.

This money comes from......where exactly? Maybe this is better posted in sactoking's thread.

Chuck
 

sactoking

Diamond Member
Sep 24, 2007
6,763
1,495
136
So then is this just the insurance company "doing the right thing", or is ACA making them do it? (and I consider making up rules that force them to do it making them do it)
It depends, but in most cases it's the ACA making them do it. CAVEAT: If you have health insurer through a mutual company (owned by policyholders) or have a participating policy (from a stock insurer, but which acts like a mutual) then you're eligible for policyholder dividends, which act like the MLR rebate. It should be noted though that there are few mutual and participating health insurers and even the ones that do exist likely issue dividends in amounts smaller than the MLR rebates.

Unproven. Premiums have been going up for years.

Nice try though!
Eaglekeeper's original statement could have two meanings:
1) Premiums went up as a result of the MLR; or
2) MLR is part of the ACA and you only get the MLR rebate because the ACA exists so to the extent that the ACA drives up premium costs then the MLR rebates also vicariously drive up premium costs.

#1 is not true.
#2 is most definitely true. Right now we're expecting average premiums to increase 20-40% as of 1/1/2014 solely as a result of ACA market reforms.

After participating and reading sactoking in the excellent thread he started, my understanding is basically the Gov is going to force people to get insurance (stick), but give them a subsidy to do so (carrot). What's odd is, I still don't understand how a Gov that is $15T+ in debt, and $1T or so over budget, finds the money to offer a subsidy for anything.

This money comes from......where exactly? Maybe this is better posted in sactoking's thread.

Chuck
I didn't answer it in the other thread since it was never asked. I'll give a teaser answer here: tax increases (that you probably don't know about).
 

chucky2

Lifer
Dec 9, 1999
10,038
36
86
Yeah, I wanted to ask it there, but that thread was staying on such a nice track, free of that type of debate, I didn't want to spoil it. I shudder to ask what tax increases are going to cover what would seem to me would be massive Gov subsidies...am I better off not knowing?
 

MooseNSquirrel

Platinum Member
Feb 26, 2009
2,565
294
126
It depends, but in most cases it's the ACA making them do it. CAVEAT: If you have health insurer through a mutual company (owned by policyholders) or have a participating policy (from a stock insurer, but which acts like a mutual) then you're eligible for policyholder dividends, which act like the MLR rebate. It should be noted though that there are few mutual and participating health insurers and even the ones that do exist likely issue dividends in amounts smaller than the MLR rebates.



Eaglekeeper's original statement could have two meanings:
1) Premiums went up as a result of the MLR; or
2) MLR is part of the ACA and you only get the MLR rebate because the ACA exists so to the extent that the ACA drives up premium costs then the MLR rebates also vicariously drive up premium costs.

#1 is not true.
#2 is most definitely true. Right now we're expecting average premiums to increase 20-40% as of 1/1/2014 solely as a result of ACA market reforms.
Determining rise in premiums because of the aca is going to be tricky business due to the upward trend in premiums that was happeneing regardless.

I suppose we could do some extrapolation based on the last 10 years however, and that would give a reasonable guess.

But it wont stop these silly "premiums went up because of Obamacare" talking points.
 

lotus503

Diamond Member
Feb 12, 2005
6,502
1
76
Yet premiums went up for many as a result.

Good luck next year.
They have gone up by a ridiculous amount yearly before the idea was a twinkle in mitts eye.

What percentage has it gone up historically in the last 20 years?

How does that compare to now?
 

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