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Study estimates premium rebates if ACA rule had been in effect

April 5, 2012

Consumers would have received an estimated $2 billion in rebates from health insurers had the medical loss ratio rule been in effect in 2010, according to a study released today by the Commonwealth Fund. Just over half of people with individual health coverage would have received a rebate, nearly one-quarter of people with small group coverage and 15% of people with large-group coverage, the study estimates. The report presents estimated rebates by state, market segment and insurer characteristics. It estimates individual policy holders would have received the largest average rebate ($183) in 2010, followed by those with small-group ($85) and large-group ($72) coverage. The rule took effect in 2011 under the Patient Protection and Affordable Care Act. It requires health insurers to pay out at least 80% to 85% of premium dollars for medical care expenses or rebate the difference to policyholders. Consumers are expected to receive their first rebates under the rule this summer.