8.2 million Americans have discounted checks from private health insurance companies.
- Private health insurers that fail to meet spending 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 tend to pay higher costs for the essentials of daily living, any extra money is welcome. Millions of Americans have rebates through their health insurance companies, meaning they’ll be getting some extra cash soon. If you are set 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 for individuals and small businesses to spend at least 80% of their premium income on healthcare claims and quality improvements. Up to 20% can be spent on administration, marketing expenses, and profits.
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 expenses, and profit.
When private insurance companies do not meet these thresholds, they must issue refunds to policyholders. They must do so by September 30 each year.
MLR rebates are calculated on the basis of a rolling three-year average. This year’s discounts are calculated based on the 2019, 2020, and 2021 financials.
More than 8 million Americans will be checking out the rebate 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 will be exempt, and health insurers are expected to pay a total of $1 billion to policyholders.
Are you wondering how much money can come your way? Not all check deposits will be the same, and discounts may vary by plan type, insurer, and location.
Here’s a breakdown of the rebate check estimate:
- For individual health care plans, policyholders can expect an estimated refund of $141.
- For those parts of a small group health care plan, each person can expect an estimated refund of $155.
- For those parts of a large group health care plan, each person can expect an estimated refund of $78.
It is worth noting that insurers do not have to provide the rebate in the form of a cheque. They may send a discounted check or offer premium credit.
Do you have a discount check coming your way?
Your health insurance company will notify you if you have an exemption. If you have any questions you can contact your insurer directly. Keep in mind that the exact rebate total will vary — so you may pay less or more than the amount listed above.
Health care premiums in the United States are incredibly expensive, and many households struggle to pay this significant expense. Getting a little cash back can help ease some of the frustrations you may feel regarding high healthcare costs.
How will you use the extra money? Some options include using the money to pay an unexpected bill or expense, paying off credit card debt, or adding more money to your emergency fund. Another option is to treat yourself to something you’re looking to buy.
If you’re looking to improve your financial situation, you’re not alone. Check out our personal finance resources for tips.
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