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.
Check out more insurance news and updates for consumers and industry professionals.
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