New York orders WellPoint to make refunds for overcharges

Back to TopCommentsE-mailPrintBookmark and Share

Indianapolis-based WellPoint Inc. is among 11 insurers ordered to refund money to almost 600,000 New Yorkers who were charged too much for health insurance.

New York Governor Andrew M. Cuomo told the insurance companies they had to give back $114.5 million to policyholders because the carriers failed to spend the minimum 82 cents of each premium dollar on health care as required by the state, Cuomo said Wednesday in a statement. The mandate to spend a certain amount on medical care also is a federal requirement under the 2010 U.S. health overhaul law.

“In this economic climate, every penny counts and, in this case, insurance companies were overcharging New Yorkers to the tune of millions of dollars,” Cuomo said. “This should serve as a message to companies that we are watching, and we will not tolerate any action that wrongly hurts the finances of the people of New York.”

Refunds already are being sent to policyholders in the individual and small business market. The state has instructed insurers to make refunds on plans for larger employers by Dec. 15, according to the statement from Cuomo’s office.

WellPoint’s Empire BlueCross BlueShield was ordered to pay $61.1 million, the largest rebate demanded from insurers in New York. Excellus Health Plan Inc., a not-for-profit BlueCross BlueShield organization based in Rochester, New York, has been instructed to pay $21.4 million, the second-largest amount.

Other insurer refunds include $11.5 million for Connecticut-based Aetna; $5.1 million for Health Net of New York; and $4.8 million for Oxford Health Insurance Co., a unit of UnitedHealth Group Inc. of Minnesota.

New York changed its medical loss ratio, the formula that requires insurers to spend a certain portion of premium revenue on health care, in the middle of last year and applied it retroactively to January 2010, Cynthia Michener, an Aetna spokeswoman, said in an e-mail. This didn’t give the company the opportunity to price its plans “appropriately,” she said.

“The overwhelming majority of our New York business complied with the rules,” Michener said. Based on the previous requirements, “Aetna’s 2010 results would have met the standards.”

WellPoint’s Empire payments represent about 3 percent of its total premium revenue for insurance products subject to these laws, Kristin Binns, a WellPoint spokeswoman, said.

“As in previous years, and consistent with New York law, if the amount Empire pays for medical claims is unexpectedly low, Empire pays refunds to its customers,” Binns said. All Empire refunds were forwarded to affected customers as of Sept. 30, she said.

“Our spending on consumers’ health-care costs was within one-half of 1 percent of the state required level, illustrating the discipline we have in pricing our health plans to ensure premium rates closely track with expected claim costs,” said Daryl Richards, a spokesman for UnitedHealth. “In New York, the average company’s total annual rebate from UnitedHealthcare is about $120, evidence that costs closely matched premium collected.”


Post a comment to this story

We reserve the right to remove any post that we feel is obscene, profane, vulgar, racist, sexually explicit, abusive, or hateful.
You are legally responsible for what you post and your anonymity is not guaranteed.
Posts that insult, defame, threaten, harass or abuse other readers or people mentioned in IBJ editorial content are also subject to removal. Please respect the privacy of individuals and refrain from posting personal information.
No solicitations, spamming or advertisements are allowed. Readers may post links to other informational websites that are relevant to the topic at hand, but please do not link to objectionable material.
We may remove messages that are unrelated to the topic, encourage illegal activity, use all capital letters or are unreadable.

Messages that are flagged by readers as objectionable will be reviewed and may or may not be removed. Please do not flag a post simply because you disagree with it.

Sponsored by

facebook - twitter on Facebook & Twitter

Follow on TwitterFollow IBJ on Facebook:
Follow on TwitterFollow IBJ's Tweets on these topics:
Subscribe to IBJ
  1. I am a Lyft driver who is a licensed CDL professional driver. ALL Lyft drivers take pride in providing quality service to the Indianapolis and surrounding areas, and we take the safety of our passengers and the public seriously.(passengers are required to put seat belts on when they get in our cars) We do go through background checks, driving records are checked as are the personal cars we drive, (these are OUR private cars we use) Unlike taxi cabs and their drivers Lyft (and yes Uber) provide passengers with a clean car inside and out, a friendly and courteous driver, and who is dressed appropriately and is groomed appropriately. I go so far as to offer mints, candy and/or small bottle of water to the my customers. It's a mutual respect between driver and passenger. With Best Regards

  2. to be the big fish in the little pond of IRL midwest racin' when yer up against Racin' Gardner

  3. In the first sentance "As a resident of one of these new Carmel Apartments the issue the local governments need to discuss are build quality & price." need a way to edit

  4. As a resident of one of these new Carmel Apartments the issue the local governments need to discuss is build quality & price. First none of these places is worth $1100 for a one bedroom. Downtown Carmel or Keystone at the Crossing in Indy. It doesn't matter. All require you to get in your car to get just about anywhere you need to go. I'm in one of the Carmel apartments now where after just 2.5 short years one of the kitchen cabinet doors is crooked and lawn and property maintenance seems to be lacking my old Indianapolis apartment which cost $300 less. This is one of the new star apartments. As they keep building throughout the area "deals" will start popping up creating shoppers. If your property is falling apart after year 3 what will it look like after year 5 or 10??? Why would one stay here if they could move to a new Broad Ripple in 2 to 3 years or another part of the Far Northside?? The complexes aren't going to let the "poor" move in without local permission so that's not that problem, but it the occupancy rate drops suddenly because the "Young" people moved back to Indy then look out.

  5. Why are you so concerned about Ace hardware? I don't understand why anyone goes there! Every time ive gone in the past, they don't have what I need and I end up going to the big box stores. I understand the service aspect and that they try to be helpful but if they are going to survive I think they might need to carry more specialty parts.