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Obamacare rebates total $22.6M in Indiana

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Indiana consumers are set to receive rebates that are 59 percent larger this year as Obamacare continues to force health insurers to refund premiums that exceed actual medical claims by more than 20 percent.

That’s opposite the trend nationally, where insurers successfully lowered their rebates by reducing or slowing the rise in premiums.

Rebates in Indiana will average $157 per family, based on premiums charged by insurers in 2012.

Those rebates reflect the $22.6 million that insurers charged above thresholds established by the 2010 Patient Protection & Affordable Care Act. The law, better known as Obamacare, required that insurers spend on medical care no less than 80 percent of the premiums they charge to individuals and small businesses. The requirement is 85 percent for large employer customers.

Nationally, insurer rebates totaled $504 million, or an average of $98 per family, according to data released last week by the U.S. Department of Health and Human Services.

The Obama administration also claimed that the rule, known as a cap on medical-loss ratios, also led insurers to not enact $3.4 billion in premium hikes last year.

“This new standard is increasing transparency and accountability, promoting better business practices and competition among insurance companies, and ensuring consumers receive value for their premium dollars,” said Kathleen Sebelius, secretary of the U.S. Department of Health & Human Services, in a prepared statement.

It’s not clear why rebates spiked in Indiana. One challenge for insurers may have been the fact that medical spending is rising more slowly than it has in decades, even dipping in April for the first time since 1975.

A year ago, rebates in Indiana averaged $99 per family, whereas the national average was $151 per family.

Most of the rebates will flow to the small employers that sponsor health insurance for their workers. In the small group market, rebates will be paid on policies that cover 261,300 Hoosiers. The average rebate per family among small employers was $151.

It is up to employers how they pass on those savings to their workers.

Far fewer large employers saw a rebate. Large employer health plans that cover just 3,200 will receive a rebate. However, the rebate per family is large, averaging $638.

Last, 8,662 Hoosiers who are part of a health insurance plan purchased directly from an insurer—without any help from an employer—will also receive a rebate. Those refunds will average $147 per family.

Insurers can pay rebates in four ways: a rebate check in the mail, a reimbursement to the account used to buy insurance, a reduction in next year’s premium, or a refund to employers. All rebates are scheduled to be paid on Aug. 1.

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  • ACA is working
    As noted in some other articles, ACA is also a driver of overall reduction in healthcare cost (i.e. forcing hospitals and insurers to reduce cost). Insuring everyone and bending the cost curve were the main reasons for the ACA. I knew it would work in the long-term, but I am glad to see some good results early on.
  • ACA is working?
    While I've read a lot of criticism and opinions about how costs of healthcare will skyrocket with ACA - mostly political rhetoric and baseless comments filled with conjecture and speculation - it seems that the facts like the premium costs published in California and these rebates intended to restrict cost management and profits to 20%, do not seem to be holding up those "sky is falling" theories. From a business perspective, ACA has always made sense. If more of my friends, family and fellow citizens can afford healthcare insurance, taxpayers will pay for fewer of those non-emergency emergency room runs. While it may not be a right, it should be an American privilege to just go to the doctor once in a while. Adding the uninsured population will lower cost through preventative care, and more drugs and services mean growth for medicine. Hope it all pans out that way.
  • Watch out
    The implosion of the world is going to happen any time now...right, guys???

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  1. Why not take some time to do some research before traveling to that Indiana town or city, and find the ones that are no smoking either inside, or have a patio? People like yourself are just being selfish, and unnecessarily trying to take away all indoor venues that smokers can enjoy themselves at. Last time I checked, it is still a free country, and businesses do respond to market pressure and will ban smoking, if there's enough demand by customers for it(i.e. Linebacker Lounge in South Bend, and Rack and Helen's in New Haven, IN, outside of Fort Wayne). Indiana law already unnecessarily forced restaurants with a bar area to be no smoking, so why not support those restaurants that were forced to ban smoking against their will? Also, I'm always surprised at the number of bars that chose to ban smoking on their own, in non-ban parts of Indiana I'll sometimes travel into. Whiting, IN(just southeast of Chicago) has at least a few bars that went no smoking on their own accord, and despite no selfish government ban forcing those bars to make that move against their will! I'd much rather have a balance of both smoking and non-smoking bars, rather than a complete bar smoking ban that'll only force more bars to close their doors. And besides IMO, there are much worser things to worry about, than cigarette smoke inside a bar. If you feel a bar is too smoky, then simply walk out and take your business to a different bar!

  2. As other states are realizing the harm in jailing offenders of marijuana...Indiana steps backwards into the script of Reefer Madness. Well...you guys voted for your Gov...up to you to vote him out. Signed, Citizen of Florida...the next state to have medical marijuana.

  3. It's empowering for this niche community to know that they have an advocate on their side in case things go awry. http://www.youtube.com/watch?v=Lrst9VXVKfE

  4. Apparently the settlement over Angie's List "bundling" charges hasn't stopped the practice! My membership is up for renewal, and I'm on my third email trying to get a "basic" membership rather than the "bundled" version they're trying to charge me for. Frustrating!!

  5. Well....as a vendor to both of these builders I guess I have the right to comment. Davis closed his doors with integrity.He paid me every penny he owed me. Estridge,STILL owes me thousands and thousands of dollars. The last few years of my life have been spent working 2 jobs, paying off the suppliers I used to work on Estridge jobs and just struggling to survive. Shame on you Paul...and shame on you IBJ! Maybe you should have contacted the hundreds of vendors that Paul stiffed. I'm sure your "rises from the ashes" spin on reporting would have contained true stories of real people who have struggled to find work and pay of their debts (something that Paul didn't even attempt to do).

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