Providing Value for Premium Payments
A health insurance issuer who offers group or individual coverage, each plan year, will provide a rebate on a “pro rata” basis to each enrollee by “…an amount that is equal to the amount by which premium revenue expended by the issuer on activities described in subsection (a)(3) exceeds : (pp 35, lines 1 -9):
Note: Section (a) (3) refers to premium revenues that go to ‘‘…all…non-claims costs…excluding State taxes and licensing or regulatory fees” (pp 34, lines 17 – 19).
- For insurers providing coverage in the group market, 20% or a lower percentage as determined by State regulation (pp 35, lines 10 – 13).
- For individual insurance providers, 25% or a lower percentage as determined by State regulation – unless by applying such a percentage it is determined by the Secretary to have the effect of destabilizing the individual market in said State (pp 35, lines 14 – 21).
- In establishing percentages, State must seek adequate participation by issuers of health insurance, competition within the health insurance market in that State, and intrinsic value for consumers so premiums become used for clinical service and improvements in quality (pp 35, lines 22-25, pp 36, lines 1 – 3).
- The above provisions will not start until after December 31, 2013 (pp 36, lines 4 – 6).
Healthcare Reform summaries based on the original text of the Patient Protection and Affordable Care Act (Passed by the US Senate 12-24-09. Passed by the US House of Representatives 3-21-10. This summary is for informational purposes only. Actual provisions and any amended portions of the bills apply).