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Medical loss ratio returns nearly $2B to consumers

Insurance carriers return $332 million in rebates to consumers in 2014

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Thanks to the Affordable Care Act’s medical loss ratio (MLR) – or 80/20 rule – health insurance companies were required to pay $332 million in rebates to about 6.8 million people in 2014 – bringing the total over three years to almost $2 billion. The rebates are for premiums paid in 2013. The MLR amendment was authored by Sen. Al Franken (D-Minn.).

The rebates are tied to the medical loss ratio: the percentage of insurance premium dollars spent on actual health care – as opposed to marketing, administrative expenses and CEO salaries. If an insurer spends less than 80 percent for small group plans (85 percent for large group plans) on providing medical care, they must rebate the excess dollars back to consumers by August 1 of each year.

2014 is the third year of payouts through the 80/20 rule, and total rebates have dropped significantly each year – evidence that the rule is effectively reining in excessive premiums. Rebates totaled $1.1 billion in 2012 and $504 million in 2013.

In 2014, the average American household received $49, with the highest per-household rebates in Minnesota ($522), Alaska ($388), Montana ($286), Wyoming ($268), and Iowa ($206). See the statistics for your state below. Click on your state name to see more information about obtaining affordable healthcare in your state.

2014 ACA health insurance premium rebates

State Total Rebates Consumers Benefiting Average per Family
Alaska $3,062,042 11,431 $388
Alabama $990,323 10,342 $111
Arkansas $6,269,271 57,712 $183
Arizona $1,370,182 347,772 51
California $11,902,850 490,052 $39
Colorado $2,721,701 52,277 $93
Connecticut $3,019,862 69,186 $72
District of Columbia $11,411,222 164,503 $149
Delaware $734,278 5,886 $174
Florida $41,679,928 981,273 $65
Georgia $11,141,472 304,940 $53
Hawaii $4,892,872 68,090 $133
Iowa $1,753,306 14,598 $206
Idaho $1,576,721 31,589 $92
Illinois $8,387,603 108,581 $120
Indiana $11,889,719 254,127 $84
Kansas $3,615,148 59,966 $89
Kentucky $6,298,456 209,476 $43
Louisiana $4,947,832 119,720 $71
Massachusetts $15,093,428 208,751 $133
Maryland $17,265,604 206,102 $140
Maine $1,845,006 19,542 $149
Michigan $13,189,718 184,297 $118
Minnesota $523,254 1,915 $522
Missouri $14,609,316 52,661 $66
Mississippi $6,631,232 66,832 $139
Montana $2,719,595 14,170 $286
North Carolina $8,488,477 182,517 $77
North Dakota $68,894 947 $139
Nebraska $1,543, 46,444 $215
New Hampshire $77,507 16,023 $9
New Jersey $7,670,066 44,998 $300
New Mexico $68,528 628 $158
Nevada $4,049,168 74,476 $85
New York $12,147,281 617,465 $138
Ohio $11,331,726 143,327 $37
Oklahoma $6,739,649 89,648 $128
Oregon $3,082,182 49,412 $101
Pennsylvania $5,198,874 90,485 $75
Rhode Island $48,696 710 131
South Carolina $13,187,815 205,229 $92
South Dakota $2,582 867 $5
Tennessee $10,037,932 336,141 $53
Texas 13,690,983 189,005 $114
Utah 3,296,969 104,576 $81
Virginia $8,913,605 104,774 $148
Vermont $0 0 $0
Washington $792,846 9,605 $122
Wisconsin $2,584,967 69,396 $52
West Virginia $902,721 8,290 $177
Wyoming $1,483,884 8,203 $268
Guam $2,502,478 39,670 $107
Northern Mariana Islands $2113,595 1,796 $120
Puerto Rico $3,545,675 76,230 $99
Virgin Islands $0 0 $0

For a further breakdown by individual, small group and large group markets, visit HealthCare.gov.