* Sign of tangible benefits for consumers, employers-study
* Rebates seen for large segments of key insurance markets
* Supreme Court to rule on law by end of June
By David Morgan
WASHINGTON, April 26 U.S. health insurers will
pay $1.3 billion in rebates to consumers and employers this year
under a provision of President Barack Obama's healthcare reform
law that penalizes plans that devote too little of their premium
revenues to health services, an independent study showed on
The study, published by the nonpartisan Kaiser Family
Foundation, said the data illustrated some of the tangible
benefits that consumers and employers could expect from the
embattled 2010 reform law if it survives two major legal and
political election-year challenges.
Under the law, called the Patient Protection and Affordable
Care Act, health insurers must spend at least 80 percentage of
premium revenues on health expenses and quality improvements.
The rule is intended to limit the amount the $850 billion health
insurance industry devotes to marketing, administration and
Kaiser, a nonprofit healthcare research group, found that 31
percent of consumers in the individual insurance market could
expect to receive a total of $426 million in rebates on 2011
premiums, for an average of $127 per person.
About 20 percent of the insurance industry's market for
large employers could receive $541 million, while more than
one-quarter of the small group market that serves small
businesses could look forward to rebates totaling $377 million.
The rebates are due by Aug. 1 and most of the money is
expected to go to employers rather than consumers.
The healthcare law has proved unpopular with many voters and
could be struck down by the U.S. Supreme Court by the end of
June or repealed next year if Republicans gain control of the
Congress and White House in the November election. If the high
court overturned the law, insurers would no longer be required
to comply with the rebate provision.
A main target for public dislike is a reform provision that
requires most Americans to buy private health insurance by 2014
as part of a plan to extend health coverage to more than 32
million people who are uninsured.
Reform advocates insist that much of the public's dislike
for the law stems from a lack of knowledge about the advantages
it offers to consumers and others.
Some of the biggest rebate payouts are expected in states,
including Texas and Florida, where the reform law faces some of
its stiffest opposition from Republican politicians and other
"While the health reform law as a whole continues to divide
the American public, there are tangible changes taking place
that benefit consumers," said Kaiser President Drew Altman.
"Greater regulatory scrutiny of private insurance is
improving value and helping to get excess costs out of the
system," he added.
The Kaiser study is based on insurer filings to the
standard-setting National Association of Insurance Commissioners
and includes rebates already paid and insurer estimates of
planned payments on 2011 premium revenues.