JACKSON • Depending on how you get your health insurance, the check may be in the mail.

Under a provision of the Affordable Health Care Act, insurers are required to pay out a percentage of premiums to cover medical claims or rebate the excess premiums. This medical loss ratio provisions applies not only to plans sold on in the federal marketplace. It also covers commercial plans sold to individuals, small groups and large groups. It does not include self-funded plans favored by many employers.

In Mississippi, the $31.8 million in rebates for 62,563 policy holders will come primarily from three companies, said Mississippi Insurance Commissioner Mike Chaney.

“The amount varies significantly from person to person,” Chaney said.

Kaiser Health News estimated rebates of $1.3 billion nationally for 2019 based on its own analysis.

The 2018 rebates are based on medical loss ratios between 2016 and 2018, Chaney said. To receive a rebate this year, the policy had to be in place in 2018. Rebates for individual policies will go to the purchaser. Rebates on fully insured employer plans can be split between the employer and employee.

Last year, Mississippi policy holders received $10.5 million from four entities as part of the 2017 rebates. Nationally, the medical loss ration rebates were $707 million for that year.

Companies issuing rebates

For Mississippians who purchased insurance through the federal marketplace, the amount of the refund from Magnolia by Ambetter depends on the tax credits and subsidies that were applied to their premium, Chaney said.

Magnolia had a rate reduction in 2016, but it increased rates in 2017 and 2018. It will be sending back about $4.5 million to consumers, Chaney said. Ambetter began issuing its rebates last week and will continue to send them out in batches.

UnitedHealth will be issuing rebates connected with two of its subsidiaries, Chaney said. Golden Rule, which primarily issues individual policies in the commercial market, is rebating about $1.9 million to its customers.

United Healthcare, which also falls under the larger UnitedHealth umbrella, will be issuing $4 million in rebates to large group insurers.

Neither BlueCross & BlueShield of Mississippi nor Humana will pay rebates this year, Chaney said. No rebates are set for small employers.

How does it work

For plans for individuals and small employers, no less than 80 percent of premiums must go to cover medical claims, with no more than 20 percent of premiums to cover administration costs and profits. For fully insured large employers, the medical loss ratio is set at 85 percent. Self-funded insurance plans are not subject to the rebates.

The Center for Mississippi Health Policy, an independent, non-partisan organization that provides objective information to inform health policy decisions, analyzed medical loss ratio’s impact on the state in its Policy Points blog.

The intention of the medical loss ratio limits is to hold insurance companies accountable by helping to control premium costs and ensuring that individuals and businesses are getting adequate services for their money, wrote Zach Smith, the center’s deputy director. Opponents of the provision argue it adds unpredictability into the insurance market and are concerned it would lead to unsustainable losses for insurers.

“Indeed, when MLRs reach around 90%, or more, it is unlikely insurers will be able to remain profitable and continue to provide coverage sustainably because insurers are paying out more of their premium income on claims and not able to properly administer their plans,” Smith wrote.

Consumers who are unsure if they qualify for health insurance rebate can talk to their insurance companies or call the Mississippi Insurance Department at (800) 562-2957.

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