Insurers in state rebate $7.1M

Companies missed medical-care threshold, officials say

Health insurance companies owed more than $7.1 million in rebates to Arkansas consumers and businesses because the companies collected too much in premiums last year compared with what they spent on medical care, federal officials announced Thursday.

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Those rebates are in addition to the $6.7 million that St. Louis-based Centene Corp. paid to the state Department of Human Services on Sept. 30 for premiums the company was paid under the state's private-option Medicaid program.

Under the 2010 federal Patient Protection and Affordable Care Act, plans covering individuals and small businesses must spend at least 80 percent of the premiums on medical care or other patient health initiatives, rather than on salaries and administrative expenses.

Plans covering larger employers, defined in Arkansas as those with 51 or more covered employees, must allocate at least 85 percent of collected premiums for medical care.

If the spending on medical care falls below the required percentage, known as the medical loss ratio, the insurance companies must issue rebates.

Nationwide, 5.5 million consumers received $470 million in rebates, according to the U.S. Department of Health and Human Services' Centers for Medicare and Medicaid Services. The average rebate per family was $129, according to the agency.

A customer who was owed a rebate should have received a notice about it by Oct. 30, the agency said.

Of the three companies that offered plans on the Arkansas' health insurance exchange, Centene was the only one that owed rebates based on its medical loss ratio for 2014.

According to information released Thursday by the Centers for Medicare and Medicaid Services, Centene spent about 75 percent of the $133 million it collected in premiums last year on medical care and related expenses.

It refunded a total of $6,774,448 in premiums associated with about 40,053 Arkansas policyholders.

Kate Luck, a spokesman for the Department of Human Services, said $6,699,791.16 of the amount went to the state for premiums paid under the private option.

Under that program, the state uses Medicaid funds to buy coverage on the exchange for adults who have incomes of up to 138 percent of the poverty level: $16,242 for an individual, for instance, or $33,465 for a family of four.

The rebates paid to the state will ultimately go to the federal government, which is paying the full cost of the private option through 2016.

Minnetonka, Minn,-based UnitedHealth Group, which is offering plans on the exchange for coverage taking effect Jan. 1, paid $6.7 million in rebates for premiums it collected last year.

That includes $1.5 million that went to 5,831 individuals or families who bought insurance through the company's Golden Rule Insurance Co. subsidiary, for an average of about $262 per policyholder.

The company also paid a total of almost $1.3 million to small businesses and their employees, and $3.8 million to large businesses and their employees.

Other companies that paid refunds to individual consumers in Arkansas included Mid-West National Life Insurance Co. of Tennessee, which paid $294,893; Humana Insurance Co., which paid $94,531; and Companion Life Insurance Co., which paid $22,333.

Metro on 11/20/2015

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