Texas Health Insurance Rebates 2012

January 14, 2012


It may sound too good to be real, and when Texas government bodies get their way, it will not happen.About 690,000 customers are slated to obtain an believed $160 million in rebates from health insurance providers by August. 1. 2012 However the Texas Insurance Department really wants to slash that amount by three-fourths and phase in changes gradually.The department states the person insurance market might be vulnerable if companies need to make the obligations and reduce profits. Consumer groups state that everything is going to be fine which clients deserve their full refunds. A federal decision is anticipated within two days.The rebates are members of this years federal health care law, under attack by Texas along with other states and headed towards the Top Court. It takes insurance companies to invest a minimum of 80 % of premium revenue on health services and quality enhancements, having a goal of having more quality of all the health care dollar.

Essentially, what the law states caps expenses for insurance companies at 15 % for big groups and 20 % for that individual market. Anything bigger needs to be rebated to clients in the year after.

Many of the wealthy territory in Texas, since the condition adjusts insurance companies with your an easy hands. It does not reject premium increases and has not set the absolute minimum for that so-known as medical loss ratio. That measure separates investing on health care claims (the medical loss) from administrative expenses, including internet marketing with the help of SEO Services Gold Coast, lobbying, taxes and profits.

The thought of capping costs (and profits!) should be anathema to many Texas leaders. But large changes are visiting health care, as well as on this score, Texans cash to achieve.

New You are able to and many other states have firmer rules, including medical loss rules. New You are able to insurance companies collect two times just as much in medical health insurance rates as Texas, yet Texas companies will owe six occasions more in consumer rebates, based on estimations from the national insurance association.

Florida looks a lot more like Texas Florida insurance companies collect about $1 billion more in rates, but Texas continues to be forecasted to owe customers 25 % more in rebates.

Incidentally, Florida asked for a much better reprieve around the federal rule, and also the Health insurance and Human Services Department declined that request last month.

A lot more than 2,800 Texans signed instructions advocating exactly the same verdict for Texas. Within the next 3 years, the entire worth of the rebates would average $350 per person, “a significantly-needed middle-class tax cut,” the letter states.

Bob Vesey, a little-business proprietor in Arlington, authored that his monthly rates bending in 5 years, despite a $2,500 deductible with no reimbursable claims.

“Whenever we hear that some Texas authorities are attempting to deny us the cash we’re owed … we just can’t accept is as true,Inch his letter states.

Cutting current rebates not just deprives customers today. Additionally, it undercuts the emergency for many insurance companies to keep lower costs and rates, stated Stacey Pogue, a senior policy analyst in the Center for Public Policy Focal points in Austin.

Most Texans get medical health insurance through small and big groups, as well as their overhead caps have established yourself. Their rebates is going to be much more compact and can usually be came back towards the employer and put on lessen the next year’s rates.

It’s obvious that each insurance has greater overhead. Sales are created face to face, instead of to some large group, and people haven’t much leverage. However the variance in expenses is striking.

Four Texas insurance companies spent only half their rates on health care claims, based on Insurance Department data. Scott & Whitened, praised because of its consumer-friendly network, spent 91 percent on that primary expense.

Like a group, nearly three dozen service providers within the individual market spent typically 70 % on health claims this year. That’s 10 percentage points shy from the new federal standard, and when that same ratio locked in 2011, a big difference should be came back to customers.

Instead of satisfy the 80 % mark, because the law states, the Texas Insurance Department demands the medical loss ratio rise from 71 percent to 74 percent to 77 percent over 3 years. That will give companies additional time to regulate — in order to accrue bigger profits, based on your perspective.

With no adjustment, the company authored in the application, service providers would have to make dramatic cuts in expenses to stay lucrative. It is also likely, the company stated, that numerous companies would exit the trade.

Federal authorities are cautious about that outcome. They approved waivers for six states to create more compact ratios. In Maine, for example, one insurance provider using more than one-third from the business stated it might leave with no adjustment.

However the feds also have declined eight demands, including nearby Louisiana and Oklahoma. Demands continue to be examined from Texas, New York and Wisconsin. Otherwise, the ratios have established yourself.

Most are certain that the Texas market may change. Just two companies, doing under 1 % from the business, established that they’d leave the condition when the federal ratio is at place, based on an insurance coverage Department survey. Two others are departing the company entirely, not only here.

The eight biggest service providers, about 90 % from the market, stated they are remaining, period.

And permanently reason: When the health care law is upheld, countless new clients is going to be purchasing insurance, frequently with federal subsidies.

Are companies likely to leave behind everything prospective business?

Most will learn how to have great results, and they’re going to cut back on overhead — if that is their only choice.

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11 Responses to Texas Health Insurance Rebates 2012

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  3. Get A Low Cost Health Insurance Today on January 27, 2012 at 4:31 pm

    Health insurers in Texas can’t take more than 20 percent of the revenue they collect in premiums for overhead and profit after the U.S. today denied a request from the state for more generous limits.Texas Republican Governor Rick Perry’s administration had asked the U.S. to let plans led by Blue Cross and Blue Shield of Texas spend less than 80 percent of their premium revenue on patient care. Rules created under the 2010 health-care law limit the administrative costs and profits for insurers selling to individuals and small businesses.Thirty-four companies sell policies to individuals in Texas. Eight carriers who control 85 percent of the individual market have said they’ll continue selling after the profit limit is enforced, officials with the U.S. Health and Human Services Department said in denying the request.There is a not a “reasonable likelihood” that the profit limit will destabilize Texas’s individual market, said Steve Larsen, director of the U.S. Center for Consumer Information and Insurance Oversight, in a letter today to the state insurance commissioner, Eleanor Kitzman.Kitzman’s agency, the Texas Department of Insurance, said in a statement on its website that the decision doesn’t give insurers enough time to adjust their businesses. Carriers that spent less than 80 percent of premiums on care in 2011 must rebate the difference to their customers this year.“A reasonable, responsible phased-in approach would still have afforded rebates to Texas consumers without risking disruption, dislocation and withdrawal of carriers in the individual market,” the department said.Seventeen states have asked for adjustments, and HHS has denied nine of them. One state, Maine, got the higher profit ceiling it requested in 2012, and five states got a limit greater than 20 percent but less than they requested.Two states, Wisconsin and North Carolina, have requests outstanding.

  4. Christian Health Insurance Information | Health Insurance Benefits Today on February 1, 2012 at 3:02 pm

    In Texas, some 690,000 consumers may receive approximately $160 million in insurance rebates in August. The money comes as part of the medical loss ratio provision of the Affordable Care Act, which dictates that insurers must pay at least 80% of the money they collect from premiums on medical care and if they cannot meet this standard they must return the money to policyholders. This may be good news for consumers, but state regulators are looking to cut the amount of rebates by three quarters.The state’s Insurance Department is looking for approval from the federal government to phase in the new requirement slowly over time. Initially, regulators had sought to be exempt from the medical loss ratio provision entirely. Their efforts were rejected by the Department of Health and Human Services, the agency overseeing the enactment of the Affordable Care Act, on grounds that insurers could meet the standard with no trouble. The state has been laboring for an alternative to the rule, claiming that the state’s insurance industry would be destabilized if the insurers were to succumb to the law.Several consumer advocacy groups have decried the efforts of the Department of Insurance. The money returned to consumers could have serious, beneficial implications for the state’s economy and redeem some of the trust lost between policyholders and their insurance companies.The Department of Health and Human Services is expected to make a determination on the matter within the next two weeks.

  5. Jim on March 22, 2012 at 3:23 pm

    Thousands of Texas consumers could be due rebates this summer after the federal government rejected the state’s request to phase in new requirements that health insurers selling policies to individuals pay at least 80 percent of premiums on medical expenses.

    Friday’s decision by the Health and Human Services Department means that Texans who held policies in 2011 will get money back from insurers who failed to meet that threshold. Based on 2010 regulatory filings, close to 700,000 Texans would have shared about $160 million in rebates from 22 insurers who did not meet the 80 percent rule. Twelve insurers met it.

    The amount of money actually refunded will depend on 2011 results, which have not been reported. Insurers changed their operations in anticipation of the law, analysts said.

    Consumer advocates hailed the decision, while state regulators were critical.

    “Texas’ request put insurers’ profits over consumers’ pocketbooks and would have set up the state to miss a critical opportunity to slow rising insurance premiums,” said Blake Hutson of Consumers Union. “Today’s decision is a victory for Texas consumers who buy insurance on their own.”

    The Texas Department of Insurance said in a statement: “A reasonable, responsible phased-in approach would still have afforded rebates to Texas consumers without risking disruption, dislocation and withdrawal of carriers in the individual market.”

    The new standard, called the medical loss ratio 80/20 rule, went into effect Jan. 1, 2011, as part of the 2010 healthcare overhaul. Rebates will be payable Aug. 1, said Gary Cohen, Health and Human Services director of oversight.

    Cohen said his agency determined that the new rule “will not destabilize” the state’s market for individual health insurance, as the state contended when it requested a waiver last July. Cohen called the state individual health insurance market “very robust and competitive” and said its largest insurers have indicated that they will continue writing policies in Texas.

    He said insurers appear to be making a number of moves to meet the standard, including lowering both premiums and overhead.

    Cohen said Health and Human Services has now denied nine states’ requests for a waiver from the rule and at least partly granted six. Two are pending.

    The waiver request from then-Texas Insurance Commissioner Mike Geeslin argued that the new rule “is likely to stifle competition in the market and constrain many Texans’ access to coverage.” Geeslin, whose term expired last year, said more than 700,000 Texans get individual health insurance, as opposed to group coverage offered by employers.

    As part of that request, the state asked that the insurers instead be required to meet a lower medical loss ratio, starting at 71 percent in 2011 and rising to 80 percent in 2014.

    In Friday’s statement, the Insurance Department said the federal agency “asserted that few issuers are reasonably likely to exit the individual market in Texas. The [Texas] Department’s application clearly showed otherwise. Of the 34 Texas carriers subject to the law, 23 will pay rebates based on 2010 data; at the 80 percent [loss ratio] threshold, these rebates will absorb the net underwriting profit for the entire individual market.”

    According to regulatory filings, insurers reported a net underwriting profit of $153.4 million on $1.8 billion in premiums in 2010.

    Cohen, in a conference call with reporters, noted that Texas law requires insurers who withdraw from the state to stay out at least five years. That will likely prevent insurers from leaving Texas, he said, because under the healthcare law, individuals will have to buy health coverage starting in 2014, and insurers won’t want to be shut out of such a big market.

    Using the 2010 figures, the largest rebate, $89.6 million, would have been paid by Blue Cross Blue Shield of Texas. With about 55 percent of the market, Blue Cross is the state’s largest writer of individual health policies. That rebate would have averaged about $220 for each of 407,187 people covered.

    Blue Cross, according to state regulatory filings, paid out 69.9 percent of its $937 million in individual health premiums in medical benefits after adjustments allowed under the rule.

    In a statement issued Friday, Richardson-based Blue Cross said it will “fulfill our obligations” under the law, although it said “it would be premature to predict the likelihood of potential rebates.” The company said it will continue to “improve the quality of healthcare, increase efficiencies and help improve medical outcomes for our members.”

    The lowest medical cost ratio for a Texas individual-health insurer in 2010 was 49.9 percent by Citizens National Life Insurance Co. It would have paid a rebate of $560,220 on its nearly $2.1 million in premiums, according to regulators.

    Read more here: http://www.star-telegram.com/2012/01/27/3693994/some-texas-health-insurers-ordered.html#storylink=cpy

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  7. ADAM on March 23, 2012 at 1:47 pm

    The Supreme Court on Monday appeared ready to clear away the last remaining obstacle to a historic ruling on President Obama’s health care overhaul law. At the opening of three days of arguments, the justices’ questions suggested that they were receptive to a point on which both supporters and opponents of the law agree: that the court should decide the case now rather than waiting until the law’s penalties for not having health insurance become due.

    On Tuesday, the court will turn to the central question in the case, the constitutionality of the law’s requirement that most Americans obtain insurance or pay a penalty.

    The courtroom on Monday was packed to capacity, including with some members of the public who had waited in line since Friday, and the justices seemed energized, talking over each other more than usual.

    Outside, demonstrators came with signs, while Rick Santorum, a candidate for the Republican presidential nomination, made an appearance in front of the courthouse to highlight his opposition to the law — Mr. Obama’s signature legislative accomplishment — and to note that another Republican candidate, Mitt Romney, had signed a state law with similar features when he was governor of Massachusetts.

    The argument on Monday was a sort of appetizer to Tuesday’s main course, a 90-minute debate over whether the court has the authority to hear the case at all given an 1867 law, the Anti-Injunction Act, which says taxpayers may not challenge taxes until they become due. The first penalties for violating the health care law’s individual mandate do not kick in until 2014, and they must be paid on federal tax returns in April 2015.

    “This case presents issues of great moment,” said Solicitor General Donald B. Verrilli Jr., “and the Anti-Injunction Act does not bar the court’s consideration of those issues.”

    The justices appeared to agree, and they seemed ready to proceed to the main question, rather than to announce in June — as the presidential campaign enters its final stages, when a decision is expected to be announced — that it would avoid giving an answer. It remains possible, though, that the Anti-Injunction Act will play a role in the case, as it could provide at least some of the justices with a way to avoid a decision if they are dissatisfied with the available options.

    The Anti-Injunction Act says that “no suit for the purpose of restraining the assessment or collection of any tax shall be maintained in any court by any person.” In other words, people who object to taxes must pay first and litigate later.

    That is so, said Justice Stephen G. Breyer, because “taxes are, for better or worse, the life’s blood of government.”

    The United States Court of Appeals for the Fourth Circuit, in Richmond, Va., ruled last year, in interpreting the 1867 law that courts are for now powerless to decide the health care law’s constitutionality.

    The Obama administration had pressed this argument in trial courts but abandoned it on appeal. The challengers to the law have always said the 1867 law poses no obstacle to immediate review.

    In the Supreme Court, the administration suggested that the justices appoint an outside lawyer to argue that the 1867 law bars the challenges. The justices asked Robert A. Long to do so, and he went first on Monday.

    “I would not argue that this statute is a perfect model of clarity,” Mr. Long said.

    He was followed by Mr. Verrilli, the solicitor general, arguing for the Obama administration, and Gregory G. Katsas, who represents the private parties challenging the law. Mr. Verrilli, whose style of argument is sober and deliberate, will return on Tuesday, arguing against two lawyers with more colorful approaches: Paul D. Clement, representing the 26 states challenging the law, and Michael A. Carvin, who is representing the private challengers.

    Mr. Long said the 1867 law was “jurisdictional,” meaning it forbids courts from hearing suits even if, as here, neither side objects.

    Mr. Verrilli walked a fine line. He has told the court that the administration wants a prompt ruling on the health care law and that the 1867 law should not stand in the way. Yet the administration does not want to damage its ability to rely on the 1867 law in other cases.

    There were other complications. Mr. Verrilli’s argument that the penalty is not a tax for purposes of the 1867 law was in potential tension with one he will make on Tuesday, that the mandate was authorized not only by Congress’s power under the commerce clause but also by its power to levy taxes.

    “Today you are arguing that the penalty is not a tax,” Justice Samuel A. Alito Jr. said. “Tomorrow you are going to be back and you will be arguing that the penalty is a tax.” Mr. Verrilli argued that the name Congress gave to the payment required for violating the mandate in the health care law — calling it a penalty, not a tax — mattered for purposes of the 1867 law but was irrelevant in connection with the constitutional taxing power.

    The challengers to the law, represented by Mr. Katsas, agreed with Mr. Verrilli that the court might decide the case on the merits now. Mr. Katsas said the penalty for failing to obtain insurance was not the sort of tax the 1867 law concerns.

    Mr. Katsas also said that the challenge was in any event to the mandate, which applies to virtually every American, rather than to the penalty, which applies to a smaller group.

    “The purpose of this lawsuit is to challenge a federal requirement to buy health insurance,” Mr. Katsas said. “That requirement itself is not a tax. And for that reason alone, we think the Anti-Injunction Act doesn’t apply.”

    Chief Justice John G. Roberts Jr. said that was a distinction without a difference. “It seems very artificial to separate the punishment from the crime,” he said.

    In a brief filed with the court, the states challenging the health care law press a further argument. They say that the 1867 law does not apply to them even if it applies to the private challengers.

    An oddity of the case, United States Department of Health and Human Services v. Florida, No. 11-398, is that a ruling from the Supreme Court that it lacks jurisdiction could be easily reversed by Congress, which is free at any time to amend the 1867 law. The prospect of having to rehear the case in short order may not be attractive to the justices.

    At the conclusion of Monday’s argument, Chief Justice Roberts thanked Mr. Long for his assistance to the court and added, superfluously, that “we will continue argument in this case tomorrow.”

  8. Madonia on March 29, 2012 at 3:19 pm

    If you were one of the hundreds of thousands of consumers who were looking forward to getting money back from their health insurers you may have to wait a while. Seventeen states, including Florida, Michigan and Texas are asking the Department of Health and Human Services to delay the medical loss ratio rule which would require health insurers to spend 80 cents of every health insurance premium dollar on direct patient care. Under the 80/20 rule, health insurers who haven’t been following that rule would have to return money to health insurance customers, probably in the form of rebates.

    Millions in health insurance rebates are at stake. For example, under the 80/20 rule, health insurers in Texas that now exceed the 20 percent mark for overhead expenditures are currently due to rebate an estimated $160 million next year to Texans who buy insurance on their own, but the Texas Department of Insurance has asked the federal government for a delay on the rebate plan. Instead, Texas is asking HHS to phase in the 80/20 rule over three years. According to the Texas Department of Insurance, the delay is needed to stop smaller health insurers from leaving the state or going out of business.

    Of course, considering how little some health insurers are spending on medical care… well, we don’t know that there will be that many consumers that miss them. According to documents filed with the federal government, for example, Standard Life and Casualty Insurance is spending a whopping 53 percent of premiums on medical care. 47 cents on every health insurance premium dollar is going to overhead and profit.

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