28,042 Iowans will receive $1,469,276 in rebates as a result of the 80/20 rule requiring insurance companies to spend 80% of premiums on patient care
DES MOINES, IOWA – Iowa consumers will receive $1,469,276 in health insurance rebates as a result to the Affordable Care Act’s 80/20 standard. Checks will be in consumers’ hands by August 1, along with a notice that the rebate is a direct result of the health care law.
Consumers owed a rebate will see their value reflected in one of the following ways:
a rebate check in the mail;
a lump-sum reimbursement to the same account that they used to pay the premium if by credit card or debit card;
a reduction in their future premiums; or
their employer providing one of the above, or applying the rebate in a manner that benefits its employees.
For those consumers who are not getting a rebate, it means that their insurance companies are already spending 80% of their premiums on patient care.
Every Iowa consumer will receive a notice from their insurance company informing them of the 80/20 rule, whether their company met the standard, and, if not, how much of difference between what the insurer did or did not spend on medical care and quality improvement will be returned to them.
The Affordable Care Act requires that insurance companies spend at least 80 percent of premiums on patient care. This 80/20 provision guarantees that consumer premiums are going back to the consumers themselves—and not use for CEO bonuses or corporate retreats. Insurance companies who do not meet this 80 percent threshold must pay rebates to consumers. The amount depends on the extent to which the insurer fell below the 80 percent.
The 80/20 standard is just one of the ways that the Affordable Care Act increases transparency and extends new protections to American consumers.
“This year, Iowa consumers will actually be getting money back from their insurance companies,” said Matt Sinovic, executive director of Progress Iowa. “This sort of rebate would have been unheard of a few years back, but thanks to ObamaCare we can now come to expect this sort of transparency and consumer protection. It’s nice to have someone on our side that’s looking out for consumers’ best interests.”
For many consumers, the 80/20 rule motivated their plans to lower prices or improve their coverage to meet the standard. This is one of the ways the 80/20 rule is bringing value to consumers for their health care dollars.
For a detailed breakdown of these rebates by state and by market, please visit this site.
