Oklahoma Families To Receive Health Insurance Rebates by Aug 1st.

by Helen Grant

It’s no secret Oklahoma’s law makers and government officials have been firmly against implementing the Affordable Care Act. In 2011 Attorney General Scott Pruitt filed a lawsuit in U.S. District Court, Eastern District of Oklahoma, challenging the constitutionality of the individual mandate. While that process slowly muddled along, rules changed. The US Supreme Court ruled in June 2012 that the individual mandate was unconstitutional, but that the act could stand with a system that taxes or penalizes individuals and businesses for not purchasing or providing health insurance. The IRS was on board with the change, as it had finalized a rule allowing it to collect penalties from businesses that do not comply with provisions of the law in all 50 states. In September 2012 Pruitt filed an amended complaint, which also challenged the IRS rule and argued the penalties were only applicable to states that develop state-based health coverage. Gov. Mary Fallin announces in November of 2012 Oklahoma will not pursue a state-based health care exchange, opting to participate in an exchange created by the federal government. By the time December 2012 rolls around the federal government files a motion to have Pruitt’s lawsuit dismissed and by January 2013 Oklahoma files its response to the motion to dismiss. Are things settled?

Hardly. This past February Fallin announced that lawmakers had to get on the ball to rework the state’s Insure Oklahoma program so no one loses health-care coverage when the Affordable Care Act goes into full operation at year’s end. Meanwhile in March the Oklahoma Insurance Department, which regulates health insurance policies in the state, will not enforce the Affordable Care Act.

“It is unfortunate that health insurers are being forced into a system of dual regulation by the overreaching Obama administration,” Insurance Commissioner John Doak said in a statement. “My position on this has never wavered, and I welcome every opportunity to try to overturn Obamacare.”

Since Oklahoma’s Insurance Department is resistant to enforcing the health care regulations of the Affordable Care Act, it does leave the door open for questions as to whether or not the Affordable Care Act will have as much impact here as it does in other states. The main reason the agency is resistant is that it believes consumers will bear the financial burden of additional regulation.

Even so, the Health and Human Services (HHS) Secretary Kathleen Sebelius announced that 273,694 Oklahoma residents should expect to benefit from $16,014,997 in rebates from insurance companies this summer in part because of regulations outlined in the Affordable Care Act. The average rebate is about $92 per family.

According to a statement from the White House nationwide, 77.8 million consumers saved $3.4 billion up front on their premiums as insurance companies operated more efficiently. Therefore, the federal government expects consumers nationwide will save $500 million in rebates, with 8.5 million enrollees due to receive an average rebate of around $100 per family.

The Medical Loss Ratio standard, also known as the “80/20 rule”, was created under the Affordable Care Act. It requires insurers to spend at least 80 cents of every premium dollar on patient care and quality improvement. If they spend an excessive amount on profits and red tape, they owe rebates back for the difference no later than August 1, 2013.

“This new standard is increasing transparency and accountability, promoting better business practices and competition among insurance companies, and ensuring consumers receive value for their premium dollars,” said Secretary Sebelius. “Today’s announcement shows that more Oklahomans are benefiting from the tools created under the Affordable Care Act to keep consumer costs down.”

Also outlined in the statement were ways in which companies have been motivated to lower prices. To that end, Oklahomans owed a rebate will see their value reflected in one of the following:

· a rebate check in the mail

· a lump-sum reimbursement to the same account that they used to pay the premium if by credit card or debit card

· a reduction in their premiums

· their employer using rebates to improve their health coverage

Insurance companies that do not meet the standard will send consumers a notice informing them of the rule. The notice will also let consumers know how much the insurer did or did not spend on patient care or quality improvement, and how much of that difference will be returned as a rebate.

According to the statement, the 80/20 rule works, along with the required review of proposed double-digit premium increases, to stabilize and moderate premium rates. And, with new market reforms, including the guaranteed availability protections and prohibition of the use of factors such as health status, medical history, gender and industry of employment to set premiums rates, this policy helps ensure every American has access to quality, affordable health insurance.

For an overview of insurers’ MLR data in 2012, please visit:
http://www.cms.gov/cciio/Resources/Forms-Reports-and-Other-Resources/index.html#Medical Loss Ratio

For more information on the MLR provision in the Affordable Care Act:
http://www.healthcare.gov/news/factsheets/2010/11/medical-loss-ratio.html