Health insurance policyholders in Missouri will receive $14.6 million in rebates from health insurers under a provision of the Affordable Care Act known as the Medical Loss Ratio rule. Kansas policyholders will receive $3.6 million.
The Medical Loss Ratio rule requires insurance companies to spend at least 80 percent of premium dollars on medical care and quality improvement, as opposed to administrative costs like salaries and marketing.
Insurers that don't meet that benchmark have to refund the difference to customers.
A statement released by U.S. Health and Human Services Secretary Sylvia M. Burwell said that 352,661 Missouri consumers will benefit from the rebates on 2013 premiums, meaning families will receive an average of $66 apiece.
In Kansas, nearly 60,000 health insurance enrollees will benefit from the rebates, getting an average of $89 per family.
Of the companies operating in Missouri and Kansas that owe refunds, Blue Cross Blue Shield of Kansas City owed the most. Federal health officials said the company will be obliged to return $2.4 million to Missouri customers holding small-group plans and $1.18 million to Kansas customers holding individual plans.
Blue Cross Blue Shield of Kansas, the state's dominant private health insurance company, met the law's standards and will owe no refunds.
Nationwide, insurance companies will pay out $332.2 million to 6.8 million consumers, health officials said.
Consumers will get the refunds in one of several ways: a mailed refund check to policyholders by Aug. 1; a reimbursement to the policyholder's premium account; or a direct reduction in future premiums. Employers handle the refunds to those who buy insurance through them.
Click here for an overview of insurers’ 80/20 data in 2013.
Click here for more information on the 80/20 rule.
This story has been updated to include information on Blue Cross Blue Shield of Kansas City and Blue Cross Blue Shield of Kansas.
Mike Shields is managing editor of KHI News Service, an editorially independent reporting program of the Kansas Health Institute.
