Health insurers could pay $16.5M in rebates

April 30, 2012

Health insurance customers in Indiana will get an estimated $16.5 million in rebates this year, but the average amount received per person will be less than the national average and just a small chunk of the total cost of coverage.

Those are the results of an analysis released last week by the California-based Kaiser Family Foundation. It analyzed new filings by health insurers, mandated by the 2010 Patient Protection & Affordable Care Act, filed with nearly all states nationwide.

The law requires that health insurers spend at least 80 percent of their customers’ premiums on medical care, as opposed to overhead or profit. For large employers, the requirement is 85 percent.

All told, the nation’s insurers estimate they will hand back $1.3 billion to their consumers, or an average of $127 per person covered by a rebate-paying plan, according to the Kaiser report. For a family of four, the rebates would be $500—or about 3 percent of the typical cost of family coverage, according to Kaiser survey data.

In Indiana, the average rebate per person is projected to be $45—or $180 for a family of four. The actual rebates, which will be paid in August, likely will vary from the estimates.

Indiana’s small-employer health plans will see the biggest chunk of rebates—$10.9 million. More than three out of every five people insured by such plans are estimated to receive a rebate—over double the national average.

The rebates are projected to average $47.26 per person, or for a family of four, about $189. Most of those savings will go back to employers, however, not to individuals, since employers pay the majority of health insurance premiums for their workers.

The percentage of enrollees receiving rebates ranked Indiana No. 7 out of 41 states’ small group markets analyzed in the Kaiser report. But the average amount of rebates were smaller in Indiana than in all but 11 other states in the report.

About 75 percent of those small employer rebates--or about $8.2 million--are expected to be handed out by Anthem Blue Cross and Blue Shield of Indiana, according to a filing with the Indiana Department of Insurance. Anthem expects to issue no rebates to its individual or large employer customers.

Anthem is by far the largest health insurer in Indiana. Among employers that actually purchase insurance—as opposed to merely hiring Anthem to process medical bills—Anthem claims 63 percent of the small-employer market and 66 percent of the large-employer market, according to data from the actuarial firm Milliman.

In the individual market, Anthem claims about 60 percent of all customers.

Indiana ranked 16th highest for the percentage of individual health plan enrollees in rebate-paying plans, according to the Kaiser report. Nearly one-third, or 31 percent, of Hoosiers with individual health insurance are in health plans that are projected to pay a rebate—which equaled the national aveage.

But the amount those customers will get is $27.43—or about $110 for a family of four—which ranks No. 40 out of the 47 states cited in the report. Total rebates in the individual market were estimated to be $2 million.

For large employers, which includes any company with more than 50 workers, only 17 percent of their health plan members are in line for a rebate. That percentage ranks Indiana No. 12 among the 34 states included in that portion of Kaiser’s report. But it was a tick under the national average of 19 percent.

For large-group workers and dependents receiving rebates, they can expect $56.37 apiece—or $226 for a family of four.


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