The Enquirer

Nearly 500,000 people in Ohio, Kentucky and Indiana will get refunds or other consideration totaling $19.4 million because their insurers didn’t spend 80 percent of their 2013 premiums on patient care. The requirement, which was designed to curb administrative costs in health care, is one part of the Patient Protection and Affordable Care Act.

Health and Human Services Secretary Sylvia M. Burwell announced Thursday that 35,361 consumers in Ohio will benefit from roughly $1.2 million in refunds from insurance companies this summer, averaging $69 per family.

In Kentucky, 209,476 consumers will get $6.3 million in refunds, or an average of $43 per family.

In Indiana, 254,127 consumers will receive roughly $11.9 million in refunds or an average of $84 per family.

Obamacare’s 80/20 rule, which went into effect in 2011, requires insurers to spend at least 80 percent of premium dollars on patient care and quality improvement.

If insurers spend more than 20 percent of premiums on profits, bonuses or red tape, they owe a refund back to consumers.

“Standards like these created under the health care law are providing ... immediate savings and are helping to keep costs down over the long-term,” Burwell said in a news release. “The 80/20 rule is bringing transparency and competition to the insurance market, ensuring that consumers are continuing to receive value for their premium dollars.”

But those “refunds” may not come directly to every consumer.

The health reform law allows these ways of distributing the “refund” money back to subscribers:

• A 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 future premiums.

• Letting their employer use refunds to improve their health coverage.

Nationwide, consumers will receive $330 million in refunds, with 6.8 million consumers due to receive an average national refund benefit of $80 per family.

There are six insurers that owe refunds to Ohio residents. The biggest amount is about $471,000 owed by Trustmark Life Insurance of Lake Forest, Illinois, to small group plans. The amount represents 39 percent of the refunds due in the Buckeye State.

Of the four insurers that owe refunds to Kentucky consumers, one company – Anthem Health Plans of Kentucky – owes 70 percent of the total, with $4.4 million due to individual subscribers.

Of the 12 insurers that owe refunds to Indiana consumers, Anthem Insurance Cos. Inc. owes $6.2 million or 52 percent of the state total. The refunds are due to small group plans.

The Obama administration believes consumers have saved a total of $9 billion on their health insurance premiums since the 80/20 rule took effect.

Officials said that in 2013 alone, consumers nationwide saved an estimated $3.8 billion because of reduced premiums as insurance companies operated more efficiently.

Beside creating insurance marketplaces and tax credits, the Affordable Care Act prohibited coverage exclusions because of pre-existing conditions exclusions and charging women more for insurance than men. ■