8.2 million Americans owe rebate checks from private health insurance companies.
- Private health insurers that do not meet the cost rules must return excess profits to policyholders.
- More than 8 million Americans will receive refund checks ranging from about $78 to $155.
As we all adjust to paying higher costs for everyday essentials, getting a little extra cash is welcome. Millions of Americans receive discounts through their health insurance companies, which means they will soon receive extra money. If you’re willing to receive a rebate check, it can increase your bank account balance.
The Affordable Care Act outlines the rules that private health insurers must follow.
The Medical Loss Ratio (MLR) provision requires insurers that cover individuals and small businesses to spend at least 80% of their premium income on health care claims and quality improvement. Up to 20% can be spent on administration, marketing costs and profit.
For large group insurance plans, insurers must spend at least 85% of their premium income on health care claims and quality improvements, leaving up to 15% for administration, marketing costs and profit.
When private insurance companies do not meet these thresholds, they must reimburse policyholders. They must do this by September 30 each year.
MLR discounts are calculated based on a rolling average of three years. This year’s discounts are calculated based on the 2019, 2020 and 2021 financial statements.
More than 8 million Americans are set to receive rebate checks in the coming weeks.
Private insurers are expected to pay $1 billion in rebates
Based on an analysis by the Kaiser Family Foundation, an estimated 8.2 million Americans are owed deductibles, and health insurers are expected to pay a total of $1 billion to policyholders.
Wondering how much money could come your way? Not all check totals will be the same and discounts may vary by plan type, insurer and location.
Here’s a breakdown of the discount check predictions:
- For individual health plans, policyholders can expect an approximate refund of $141.
- For this portion of a small group health plan, each individual can expect an approximate reimbursement of $155.
- For this portion of a large group health plan, each individual can expect an approximate reimbursement of $78.
It is worth noting that insurers do not have to provide the discount in the form of a check. They may send a rebate check or offer premium credit.
Are you expecting a rebate check?
Your health insurance company will let you know if you owe a discount. You can contact your insurer directly if you have any questions. Note that the exact rebate totals will vary — so you may be owed less or more than the amounts listed above.
Health care premiums in the United States are incredibly expensive, and many households struggle to pay this important expense. Getting some cash back can help ease some of the frustrations you feel about high health care costs.
How will you use the extra money? Some options include using the money to pay an unexpected bill or expense, pay off credit card debt, or add extra funds to your emergency fund. Another option is to treat yourself to something you’ve been meaning to buy.
If you want to improve your financial situation, you are not alone. Check out our personal finance resources for advice.
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