Q: I’m a bit skeptical whenever I hear wonderful things, or terrible things, about Obamacare. However, I work with someone who swears we’re going to get rebate checks from our insurance companies this summer. That would be nice, but is it true?
A: You are right to be skeptical about what you hear on both sides of the of the healthcare opinion debate. Those who say it will fix all our healthcare woes, as well as those who say it will wreck our healthcare system, are both -in my opinion- exaggerating.
The rebate is a good example. Yes, the law requires that at least 80% of the amount insurance companies collect from premiums be actually spent on medical care; with no more than 20% going toward administrative costs. It’s called the 80/20 rule. This provision in the law is meant to curtail excessive profits and excessive CEO bonuses and requires the overage be returned to consumers.
As a result, the department of Health and Human Services (HHS) predicts that over 12 million consumers will be reimbursed over 1 billion dollars – that’s one thousand million. Those are big numbers. And it makes it sound like we’re all going to get a nice rebate check, right? Not really.
Here’s why. According to HHS, the majority of insurance companies met or exceeded the 80/20 rule, and therefore won’t be giving out rebates. Of those that do, the majority of the rebates will go to employers, which makes sense, since they pay the lion’s share of insurance premiums for most of us. So what’s described as “over a billion in rebates for millions of consumers” is actually been distributed indirectly through employers. Companies are then supposed to use the rebate money to benefit employees in the future.
Now, if you’ve bought insurance on your own from the individual market, you’re more likely to get an actual rebate. Otherwise, don’t hold your breath.
To me, the hype about the rebate compared with the somewhat disappointing reality – is an apt illustration of how both sides exaggerate what’s good and what’s bad about the law. So stay skeptical, educate yourself and don’t believe everything you hear. Whether good or bad.
© Copyright Eva Del Rio
