The check is in the mail from health insurers, but Hoosiers won’t get big payday

Attention Hoosiers: Don’t look for a huge rebate check in the mail from your health care insurer.

Nationwide, health insurers have paid about $2.5 billion in premium rebates this year, likely a record amount, to members under the Affordable Care Act’s medical-loss ratio requirement, or an averages of $219 a person.

But in Indiana, the amount is smaller: just $2.1 million, or $25 a person, according to data from the Centers for Medicare and Medicaid Services.

Only five other states—North Carolina, North Dakota, Rhode Island, West  Virginia and Wyoming—received less per person in insurance rebates than Indiana.

It’s unclear why Indiana policyholders will get less than much of the nation on a per-person basis. It could depend on the type of policy their employer buys and how much their various insurers paid out in claims over the past three years.

Under the Affordable Care Act, health insurers are required to spend at least 80% of the revenue they get from premiums on medical care, or 85% if an organization buying the insurance for its workforce has more than 100 employees. That is known as the medical-loss ratio, one of the closest watched figures in the health insurance industry.

If the insurer falls short for any reason, it must give members a credit at the end of the plan year. Nationally, about 8 million individuals are expected to qualify for a rebate, according to CNBC.

Such refunds are issued yearly, but this year’s amount is nearly double the $1.4 billion issued last year, due to higher profits by insurance companies in recent years, and less money paid out in claims as a percentage in premiums.

It’s expected that rebates could set a record this fall, Karen Pollitz, a senior fellow with the Kaiser Family Foundation, told CNBC.

Each year, the medical-loss ratio is calculated based on a rolling three-year average, she said. So the rebates this year are from 2017, 2018 and 2019. Insurers typically either send a check to policyholders or deduct the rebate from premiums and send a check to individuals no longer enrolled but due a piece.

During the second quarter, health insurers across the U.S. saw profits soar, even as thousands of other businesses, from restaurants to airlines, struggled to stay afloat. Insurers said the higher profits were due to Americans are putting off expensive procedures and even routine office visits during the pandemic.

Industry leaders said the higher profits would be only temporary, and predicted they would eventually pay billions of dollars to treat COVID-19 patients.

In the second quarter,  Indianapolis-based Anthem Inc. paid only 78 cents for every dollar collected, down from 87 cents in the same period a year ago. It blamed much of the decrease on customers deferring expensive surgeries and other procedures during the pandemic. In the third quarter, Anthem paid 86.8% of premiums on medical care.

During the second quarter, UnitedHealthcare and Aetna spent just 70 cents of every dollar on claims in the quarter.

Now, insurers are trying to make even with customers in the form of rebates, credits and other givebacks.

To make up for the shortfall, Anthem said in July it provided a one-month premium credit to members enrolled in certain individual plans and fully insured employer group customers, in amounts ranging from 10% to 15% of monthly premiums. It also provided a one-month, 50% premium credit to individuals in stand-alone and group dental plans. However, many employer groups buy self-insured plans and thus haven’t qualified for credits.

Roughly 11.2 million Americans are eligible for rebates this year, according to Becker’s Hospital Report. The rebates are across individual, small group and large group markets.

Here are the rebate totals listed by state, based on reports filed through Oct. 16:

Alabama: $53,454
Alaska: $14.6 million
Arizona: $89.3 million
Arkansas: $14.6 million
California: $111.3 million
Colorado: $19.3 million
Connecticut: $51,497
District of Columbia: $31.8 million
Delaware: $21.6 million
Florida: $246.3 million
Georgia: $86.7 million
Hawaii: $2.9 million
Idaho: $279,235
Illinois: $132.4 million
Indiana: $2.1 million
Iowa: $25.3 million
Kansas: $24.6 million
Kentucky: $407,121
Louisiana: $14.3 million
Maine: $19.9 million
Maryland: $76.1 million
Massachusetts: $51.6 million
Michigan: $59.7 million
Minnesota: $42.2 million
Mississippi: $37.4 million
Missouri: $192.8 million
Montana: $15.2 million
Nebraska: $2 million
Nevada: $14.4 million
New Hampshire: $23 million
New Jersey: $24.9 million
New Mexico: $15.2 million
New York: $29.5 million
North Carolina: $4.8 million
North Dakota: $0
Ohio: $7.4 million
Oklahoma: $88.9 million
Oregon: $276,976
Pennsylvania: $166.3 million
Rhode Island: $0
South Carolina: $37.7 million
South Dakota: $814,462
Tennessee: $129.3 million
Texas: $279 million
Utah: $7.9 million
Vermont: $54,756
Virginia: $162.7 million
Washington: $45.5 million
West Virginia: $0
Wisconsin: $86.1 million
Wyoming: $0

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