Almost a third of people who bought their own insurance last year will get refunds averaging $127 under a provision of the new health care law, according to a new analysis of state data from the Kaiser Family Foundation, a nonprofit research group.
The checks are due consumers and businesses by Aug. 1, but the percentage of those who can expect the rebates varies widely by state, the foundation said.
In some states, like Vermont, Rhode Island, Iowa and Hawaii, less than one percent of consumers who bought policies will be due refunds.
But in Texas, 92 percent of consumers who purchased individual policies can expect to get rebates because their insurers spent too much of their premium payments on administrative costs and too little on actual medical care.
Under the federal law, insurance companies must spend at least 80 percent of the money they get from premiums on medical costs or quality improvements; the rest can go toward administrative costs and profits. However, if insurers set their premiums too high, then consumers are due either rebates in the form of checks or discounts off future premiums.
The purpose of the requirement, which went into effect last year, "isn't to generate rebates, but to force insurers to align their premiums more closely with their (medical) claims costs," health law expert Timothy Jost, a professor at Washington and Lee University School of Law, said in a statement.
"Each year, premium costs have gone up more than medical costs, so what the rule does is force insurers to be more efficient and, if they charge too much, to give some back," Jost said.
The report estimates that the rebates will total about $1.3 billion nationally. About 3.4 million people who bought their own coverage are expected to receive rebates from 215 insurance plans, according to the report.
Because the foundation based its analysis on preliminary estimates that insurers provided state regulators, actual rebate amounts may differ, the report's authors said.
The Wall Street Journal reports that the new estimates don't include the rebates that will be paid in California, because the state hasn't received filings from all health plans.
The biggest checks are due consumers in Alaska ($305 per person), Maryland ($294), Pennsylvania ($243) and Idaho ($241).
Insurers did a better job of pricing their policies sold directly to consumers in other states, including Hawaii, Maine and the District of Columbia, so no rebates are expected for individual consumers there.
For people who joined group health plans through their employers, where premium costs are shared by workers and the company, rebates generally will go to the employers. Depending on the details of the health plan and the type of employer, rebates in some cases may be passed along to employees, according to the report.
In other health news:
You mean Nutella isn't a health food? $3 million settlement says 'nope.' ABC News reports that a class action lawsuit filed by a California mom against the makers of Nutella for making health claims about the chocolate-hazelnut spread, has been settled for $3.05 million, $2.5 million of which will be divided among consumers. Anyone who bought Nutella between Jan. 1, 2008 and Feb. 3, 2012, (or Aug. 1, 2009 and Jan. 23, 2012 in California) can file a claim for up to $4 per jar (maximum $20 per household).
Gluten-free beers -- including one from Anheuser Busch -- growing in popularity. The Washington Post reports that the number of beers made without barley for the wheat-intolerant or those with celiac disease is growing. Sorghum is the most common substitute (that's what Anheuser Busch uses in its Redbridge lager), but brewers of gluten-free beers also use millet, buckwheat, rice, tapioca and honey to ferment their brews.
Cost of obesity: Replacement toilets, wasted gasoline, lower productivity, higher insurance premiums. Reuters reports on how the nation's rising obesity rate is costing businesses, governments and individuals more in everything from gasoline to taxes. Some examples: Cars are burning nearly a billion gallons of gas more a year than if passengers were trim; obese men and women rack up more in medical costs; hospitals are even replacing wall-mounted toilets with floor models to better support obese patients.
Donut hole savings: Medicare beneficiaries saved an average of $604 per person last year. Last year, Webmd.com reports, 3.6 million seniors on Medicare saved $2.1 billion in prescription drug costs, thanks to the shrinking donut hole provision in the health care law. Seniors who hit the donut hole last year saved an average of $604 per person.
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