When health insurance rebates go out in August, Texans should see much more than the average American of the $1.1 billion being returned by insurers under the terms of the 2010 healthcare reform.
The Obama administration said Thursday that 12.8 million people will benefit from health insurance rebates averaging $151 per family. That includes 1.5 million Texans who will share $167 million, or $187 per family.
The rule, which applied to premiums paid in 2011, required insurers to spend at least 80 percent of health insurance premiums on medical benefits and quality improvement, or else rebate the shortage. The rebates must be paid by Aug. 1, either with a check or a reduction in future premiums. Employers can also decide how to pass on the money to covered workers.
That's important, because in Texas, most of the rebates, $134.5 million, are being paid to Texans who buy their own health insurance. Those families should receive about $356 per family.
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Rebates to Texans in small group and large group plans are much smaller, just over $60. And for those households, the check may not be in the mail after all.
In group plans, the employer typically pays a considerable share of the premium, experts say, and can keep its share of the rebate. Plus, employers can choose to plow all the rebate money, including the workers' share, back into improving the company's health plan. Or they could shave premiums by a few dollars in each pay period.
So how many households will get rebate checks in the mail?
"We wouldn't know that at this particular point," acknowledged Mike Hash, head of the health reform office at the Health and Human Services department. Others looking at the government's figures suggest it may be closer to 3 million.
Larry Levitt, an expert on private health insurance with the Kaiser Family Foundation, said that even if most people don't actually see a check, the rebates are still one of the most tangible early benefits of the healthcare law.
It's unlikely that this year's rebates would go out if the U.S. Supreme Court overturns the entire Patient Protection Act in a decision expected soon. If the law stands, the 80-20 requirement will force the companies to run a tighter operation, keeping administrative costs in check.
Jim Fuquay, 817-390-7552