Individual Health Insurance Policy Holders Could Get Rebates
November 2010
Insurance companies were disappointed today when the HHS ruled that starting next year a minimum of 85% of their profits will need to go towards actual medical care, restricting some of the funds previously allocated to advertising and executive salaries.
This could mean multiple things regarding medical coverage. Proponents of the healthcare bill, namely Democrats, argue that millions of Americans will get more healthcare value for their dollar. Those insurance companies that don't manage to spend 85% on medical care will be expected to refund the difference to their consumers.
This means that many people, and especially those that purchase
individual health insurance, could get rebates. This is because many individual medical coverage policies spend well less than 85% on the treatment of their buyers.
Those that oppose the
healthcare bill and new mandate, mostly Republicans and the insurance companies themselves, argue that this new regulation could destabilize the insurance market in some states, and lead companies to pull out of some states altogether.
Facts on:
Medical Coverage
Did you know...
Insurance companies will be required to spend 85% of their profits on health care in 2011.
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In response Jay Angoff, director of the Office of Consumer Information and Insurance Oversight for the HHS reminded critics that most major insurance companies posted record profits for 2010, over $9 billion in the last 3 quarters alone.
Also, some states were allowed to petition for lower standards of medical coverage oversight if it appeared that their insurance markets could be destabilized. Several states did so, including Maine, South Carolina, and Iowa.
Finally, mini-med plans, which were the subject to much debate in terms of this particular mandate, have been exempted from the law for another year until further study could be done to understand how the healthcare bill would impact this particular type of medical coverage.
Mini-med plans are less expensive plans often offered by employers that offer limited benefits and often cap coverage costs at $5,000 or $10,000 dollars per year.
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