Obama: Health insurance rebate checks are in the mail

McClatchy Washington BureauJuly 18, 2013 

President Barack Obama signs the health insurance reform bill in the East Room in Washington, D.C., March 23, 2010.

OLIVIER DOULIERY/ABACA PRESS — MCT

The Obama administration is pushing back against the Affordable Care Act naysayers.

One day after House Republicans passed legislation to delay enforcement of the health care law's individual mandate, President Obama will take to the airwaves to announce that checks are in the mail for 8.5 million Americans who'll split more than $504 million in rebates from their heath insurance company, thanks to a provision of the health law that penalizes insurers for wasteful spending.

Families on the receiving end of those rebates will get checks averaging $100. A few will of them will be on hand today when President Obama touts the success of the ACA's 80/20 rule that requires insurance companies to spend at least 80 percent of their premium dollars on medical care or quality improvements and no more than 20 percent on administrative costs and overhead.

Insurers that violate the rule must pay rebates to their customers.

Last year, nearly 13 million people split $1.1 billion in rebates based on their 2011 premiums. But as more companies complied with the 80/20 rule in 2012, the payouts were cut by more than 50 percent.

The Obama administration has also been buoyed by preliminary data that suggests greater competition will lower premiums for people who buy individual coverage outside the workplace.

In New York, state officials announced that individual premiums in the marketplace will be lower than projections by the Congressional Budget Office.

A new analysis by the Obama administration found that in 11 states where data is available, the lowest cost "silver" plan - which covers 70 percent of medical costs - will cost, on average, 18 percent less than the CBO estimated.

And an ACA provision that allows states to review any double-digit premium increases appears to have had a chilling effect on the practice. In 2010, 75 percent of insurers proposed double-digit rate increases, but that number has fallen to 14 percent in early 2013, according to senior administration officials.

In Oregon, several proposed rate hikes in the individual market were cut by amounts ranging from a few percentage points to 30 percent. Similar results were reported in Washington, D.C., Rhode Island and Vermont.

Earlier this week officials in New York announced that final rates in the individual market would be at least 50 percent lower on average than current rates.

Preliminary rates for young men, the group most likely to face "rate shock," have also been encouraging in some places. Nationally, about 750,000 young men ages 18 to 34 have individual coverage, but won't qualify for a premium tax credit next year. Many expect these customers to forego coverage altogether and just pay the fine for noncompliance.

But in Los Angeles County, which has more uninsured people than any other county in the nation, senior administration officials said the cheapest "silver" plan would cost a 25-year-old $174 a month, while a catastrophic plan would cost about $117 a month. Only young people who don't qualify for a tax credit and earn too much to get Medicaid can get catastrophic coverage under Obamacare.

After a wave of reports predicting higher premiums, the Obama administration is basking in the round of positive news.

The question is: will it last?

McClatchy Washington Bureau is pleased to provide this opportunity to share information, experiences and observations about what's in the news. Some of the comments may be reprinted elsewhere in the site or in the newspaper. We encourage lively, open debate on the issues of the day, and ask that you refrain from profanity, hate speech, personal comments and remarks that are off point. Thank you for taking the time to offer your thoughts.

Commenting FAQs | Terms of Service