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Ready for another round of stimulus? This time, it's courtesy of the insurance industry -- not Uncle Sam.
Millions of Americans stand to receive insurance company rebates by the end of the summer, as a result of a new requirement in the federal health care overhaul that strictly governs how insurers spend their cash.
The insurance industry, along with a slew of state officials, have been fighting the policy. Based on rules that were issued at the end of last year, Washington will require insurers to spend between 80 and 85 percent of premium dollars on medical care. Insurance companies that violate the rule will be required to effectively refund their customers.
But while insurers say the rules could jeopardize plans across the country, customers are nevertheless expected to receive a rebate windfall starting this year.
Preliminary estimates indicate as many as 9 million Americans could receive up to $1.4 billion in rebates. That's an average of roughly $160 a person, though the amounts are likely to vary.
Just in time for the elections !! and long enough before the rates go up (again) !!
Here's how the new system works: Starting in 2011, insurers were supposed to abide by the new rules. They require insurers in the individual and small group market to keep administrative costs to 20 percent, and to just 15 percent in the large group market. If they don't, they're supposed to send out a round of rebates by Aug. 1 of this year. That rebate could take the form of a check or credit card payment, or a reduction in premiums -- the rebates will either be distributed to individuals or employers depending on the plan.
More lay offs !!
..... The Obama administration requires companies to hold down administrative costs, advisers who act as policy brokers to help connect plans with customers could be cut out of the system.
Originally posted by neo96
The downside is higher premiums and the quality of care goes down and what they cover.
Insurance works by people who aren't using paying for those who are. the average person can go 10 to 20 years never using health insurance.edit on 17-3-2012 by neo96 because: (no reason given)