“80/20” Vision: MLR to Distribute $1.3 Billion in Rebates

The very near future of health reform is going to put the 80/20 rule in motion, providing roughly 16 million US citizens with rebate checks from insurance companies. The 80/20 rule or medical loss ratio (MLR) requires that 80% of medical care premiums be spent on healthcare for individuals rather than advertising, bonuses within the company, or other internal costs.

And they are in the works right now – by August 1st, millions of rebate checks will have arrived in the mailboxes of all their recipients.

According to Kathleen Sebelius, Secretary of Health and Human Services (HHS) Department, if the insurance companies do not meet the 80/20 rule, they owe you a rebate. Insurance companies are also liable to indicate whether they have met the limit or spent more than the MLR allows.

The rebates seem like a fair solution, and if I were not one of the fortunate ones on my parents’ plan till age 26, I would cross my fingers for a check from Blue Cross (they might get one, but I won’t ever hear about it). Which makes me wonder, who is eligible?

As with most health insurance-related mandates, each state has a different approach. Kaiser Health News released that those living in Texas who pay for individual health insurance will receive rebates because insurance companies in the state did not spend enough of their premiums on health care.

As for the amount of each rebate, it depends on the individual or household. But who can argue with a surprise check from your insurance company? That’s what the Obama administration hopes to be the unanimous response of the American public. Not everyone can be pleased, though their hostility may be temporarily alleviated by a few hundred or thousand dollars.



About B. Somers

B. Somers is a contributor to Health Insurance News, focusing on medical coverage, carriers, health reform and the conflicts surrounding insurance. Writing for the company's sites has provided a strong introduction to health insurance, and the opportunity to gain knowledge in the insurance industry.