Nearly 900,000 Missouri and Illinois residents are about to receive a rebate from private health insurance companies totaling about $120 million overall because of a provision in Obamacare that discourages overspending on administrative costs.
The premium rebates, due to millions of insurance customers nationwide by Aug. 1, are being touted as a little known benefit of President Barack Obama’s healthcare reform law, according to the St. Louis-Post Dispatch
But most health insurance clients in the two states, and nationwide, won’t receive a dime unless they are directly insured by companies. Those covered under employer self-insured plans shouldn’t expect to receive a check, according to the Post-Dispatch.
The rebates are being triggered by the so-called 80/20 rule under Obamacare, requiring health insurers to spend at least 80 percent of the money they collect on medical care and not administrative costs. Spending too much on administrative costs, such as salaries or advertising, generates a rebate to customers.
“I imagine there will be a bunch of people who change their minds about Obamacare when they get their checks,” attorney James Fox told the Post-Dispatch after he deposited a $520.89 rebate check from Anthem Blue Cross Blue Shield.
“I think it will make them feel better that their insurance companies are being held accountable for gouging.”
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