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Maine Insurance Companies to Pay $2.5 million in Affordable Care Act Premium Rebates
WASHINGTON, D.C. – Today, Congressman Michaud praised the U.S. Department of Health and Human Services’ announcement that health insurance companies will pay more than $1.1 billion in premium rebates to nearly 12.8 million Americans. A provision in the Affordable Care Act requires insurance companies to pay rebates to consumers if they spend too much of health care premiums on administrative expenses, such as salaries and marketing, instead of health care.
“I am pleased that under health care reform, Maine insurance companies will be required to pay $2.5 million in premium rebates that will benefit 10,589 Maine consumers this year,” said Michaud. “Health premiums should reflect how much insurance companies are actually spending on care, and this provision will provide relief to Mainers who have seen their insurance costs skyrocket while their health care services stay the same.”
Maine families receiving the rebate will see an average of $463, one of the highest averages in the nation for the large group market. For many consumers, the rebate will be transferred to the employer who administers the insurance plan, and it will then be either directly passed on to the employee or applied in a manner that helps the employees’ health insurance costs. Consumers may also see the rebate either as a check in the mail, a lump-sum reimbursement to the same account that was used to pay the premium if it was paid by credit or debit card, or a direct reduction in future premiums. Under the Affordable Care Act, insurance companies are required annually to make publicly available the amount they spend on health care costs and administrative costs. If the amount spent on administrative costs exceeds a certain threshold, the law requires insurance companies to issue a rebate to consumers.
More information about the health insurance rebates can be found here.