UnitedHealthcare owes nearly $50K in refunds to R.I. consumers

THE U.S. DEPARTMENT of Health and Human Services reported Thursday that UnitedHealthcare of New England owes $48,696 in refunds to Rhode Island consumers under an Affordable Care Act rule that requires insurers to pay refunds if they spend too high a percentage of premium dollars on profits and red tape. Above, a chart showing the percentage of enrollees nationwide covered by companies compliant with the rule in 2011, 2012 and 2013.
THE U.S. DEPARTMENT of Health and Human Services reported Thursday that UnitedHealthcare of New England owes $48,696 in refunds to Rhode Island consumers under an Affordable Care Act rule that requires insurers to pay refunds if they spend too high a percentage of premium dollars on profits and red tape. Above, a chart showing the percentage of enrollees nationwide covered by companies compliant with the rule in 2011, 2012 and 2013.

PROVIDENCE – Rhode Island large-group insurance customers will receive $48,696 in health insurance refunds under the Affordable Care Act, according to a U.S. Department of Health and Human Services report released Thursday.

The “80/20 rule,” also known as the Medical Loss Ratio rule, was created through the health care reform law to ensure that insurance companies operate more efficiently and prevent inordinately high insurance premiums for consumers. The rule requires insurers to spend at least 80 percent of premium dollars on patient care and quality-improvement activities. If insurers spend too much on profits and red tape, they owe a refund back to consumers.

In Rhode Island, UnitedHealthcare of New England was the only insurer to owe refunds for 2013, owing $48,696 in the large-group market. HHS reported that 710 UnitedHealthcare customers will receive an average refund of $131.

No insurers owed refunds in the individual or small-employer markets in Rhode Island.

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“We are pleased that the Affordable Care Act continues to provide Americans better value for their premium dollars,” said HHS Secretary Sylvia M. Burwell. “We are continuing our work on building a sustainable long-term system, and provisions such as the 80/20 rule are providing Americans with immediate savings and helping to bring transparency and accountability to the insurance market over the long term.”

The HHS report showed that since the rule took effect, more insurers year over year are meeting the 80/20 standard by spending more premium dollars on patient care and quality. Nationwide, 6.8 million consumers will receive a total of $330 million in health insurance refunds, with an average refund benefit of $80 per family.

Consumers in Florida will receive the most in refunds, with $41.7 million owed to more than 981,000 health insurance customers, while Massachusetts consumers will receive the second-highest refund. According to the HHS, 208,751 people in Massachusetts are entitled to more than $15 million in refunds, with an average per-family refund of $133.

Of the $15 million owed by Massachusetts insurers, $2.8 million is due to customers in the individual market, $8 million to the small-employer market and $4.3 million to the large-group market. Neighborhood Health Plan owed the most of any Massachusetts insurer, with an expected premium refund of more than $6 million.

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