Nearly two million California consumers and small business owners will get money back on their health insurance premiums this month because of new federal and state statutes requiring insurers to use at least 80% of their premium dollars for patient care. For employers with more than 51 covered employers, the threshold is 85%. Insurers will return almost $74 million in California.
Another Affordable Care Act requirement goes into effect today ensuring women receive eight types of preventive and diagnostic care in their health coverage, including breastfeeding support services.
The California rebate average of about $65 per person might not be much individually, but it could mean quite a bit to small-business employers, according to Anthony Wright, executive director of Health Access California.
"It's a bigger benefit for employers, because if you're a small business providing coverage for 30 or 40 folks, then that can add up to a decent amount of premium relief," Wright said.
"Of course, we think it's better if folks pay a lower premium on the front end," Wright said, "but the check is a symbol of the new oversight over the process."
In California, the Department of Managed Health Care and Department of Insurance share oversight of the health insurance industry and the rebates.
Anthem is expected to refund about $38.6 million and Blue Shield about $11 million, with many other insurers logging in at lower amounts.
The medical loss ratio law in California was created by passage of SB 51 (Elaine Alquist, D-Santa Clara) in 2011.
"It's another way Californians are benefitting from the federal law, but there's more to do to maximize the effects of that law," Wright said. "This is the beginning. There are decisions we're making in the next weeks and months … [decisions designed] to make reform real. This is an example of what we need to do."
Nationally, the average rebate is $151.
Beginning today, all new health insurance coverage is required to provide eight benefits for free (no co-pay, and no deductible). Coverage must include breast-feeding supplies, contraceptives, screenings for gestational diabetes, sexually transmitted infections and domestic violence, routine check-ups for breast and pelvic exams, Pap tests and prenatal care.