CMS revealed that health insurers refunded roughly $2 billion in excess premium payments to 2020 enrollees. This indicated the industry’s profitability during the COVID-19 pandemic. The Affordable Care Act mandates rebates for a percentage of premium payments if an insurer’s spending on patient claims and quality-of-care improvements falls below certain benchmarks.
DistilInfo HIGH FIVE
1. A new list:
CMS also released a list of insurers owing the medical loss ratio rebates to consumers, with payments disclosed by state and market. An estimated 9.8 million consumers are entitled to rebates on 2020 premium payments. Insurers were required to pay any money owed and provide notice of the rebates by Sept. 30.
2. Premiums:
Insurers paid a smaller percentage of premiums on claims compared to 2019, lowering medical loss ratios and boosting gross margins. KFF predicted earlier this year that individual and group market insurers would pay $2.1 billion in rebates to consumers for 2020 as a result.
3. Results:
Third-quarter results for Cigna and Molina reflected a surge in medical claims by patients obtaining coverage during the Biden administration’s special enrollment period. Humana last month cut its earnings projections for the full year due to expectations that hospitalizations related to the delta variant will push up utilization. Aetna reported higher-than-expected costs for COVID-19 treatment and a rise in its medical loss ratio in the third quarter.
Read More: Priority Health adopts Epic’s Payer Platform for patient data exchange
4. Medical care:
The ACA requires insurers to spend at least 80% of after-tax premiums on enrollees’ medical care in the small group market and 85% for large group plans. If an insurer fails to meet the MLR standard, the company is required to provide a rebate to its customers that year.
5. Rebates:
Of the 9.8 million consumers expected to receive rebates on 2020 premium payments, CMS estimates 4.8 million are in the individual market and 5 million are employees in the group market. The group market is further broken down into 2.6 million employees in the small group market and 2.4 million employees in the large group market.