Health Insurers Will Cut A $1.1 Billion Check To Consumers

Photo: flickr/flapjack

The U.S. Department of Health and Human Services (HHS) just announced that 12.8 million Americans will receive a health rebate for $1.1 billion because of the Affordable Care Act’s 80/20 rule. This averages to about $152 for each family covered by an insurance policy. The 80/20 rule says an insurance company must spend 80 per cent of the money received from a customer’s premiums on medical care and quality improvement. The remaining 20 per cent is free to be spent on administrative costs, such as sales and advertising. 

Apparently, that didn’t happen enough because insurers are being asked by the government to issue consumers a rebate for the portion of their premium that wasn’t spent by August 1. 

The rebate will be distributed as a check in the mail, a lump sum to a credit or debit card, a reduction in future premiums, or through an employer if the coverage was issued through an employer. 

According to, Vermont families will receive the largest rebate at $632. 

“Although these increases are partly due to rising medical costs and utilization of services, they are exacerbated by rising insurance company administrative costs (including marketing and salaries of CEOs) and profits, which contribute little or nothing to the care of patients or the health of consumers,” said 

As the cost of health care continues to rise, some Americans have ditched insurers and turned to health care co-ops instead. 

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