Health insurers to pay $62 million in rebates in Illinois
The Obama administration announced Thursday that 300,000 Illinoisans will benefit from nearly $62 million in rebates from insurance companies because of the federal health law that is in front of the U.S. Supreme Court.
The law, deemed “Obamacare” by its critics, requires insurance companies to spend at least 80 percent of the premiums they collect on medical care and quality improvement or return the difference to consumers and employers by Aug. 1. Most plans operated by major national employers are exempt.
In Illinois, most of the rebates will go to small businesses that buy insurance in the small group market, according to figures released Thursday by the U.S. Department of Health and Human Services. About $47 million in rebates will go to the small group market, covering 164,000 Illinoisans. The average rebate per family in Illinois’ small group market will be $551 — one of the highest rebate rates in the country.
In the state’s individual insurance market, where individuals and families buy coverage, the average rebate per family is expected to be $199, and in the large group market, the average rebate per family will be $176.
The money won’t necessarily be a check in the mail. Employers can apply rebates in a way that benefits workers or take a discount on future premiums. Individual policyholders owed a rebate will either get a check, a reimbursement to their credit card account or see a reduction in future premiums.
The insurance industry has been critical of the rebates, as well as the requirement to spend 80 percent of premiums on medical care.
Robert Zirkelbach, spokesman for America’s Health Insurance Plans, the main industry trade group, said taxes, benefit mandates and other rules in the health care law “will cause premium increases that far exceed the value of prospective rebates.”
The Supreme Court is expected to rule on a challenge to President Barack Obama’s 2-year-old health care overhaul this month. The law has drawn fierce opposition among many Republicans for its requirement that most individuals carry health insurance.