Your health insurer may owe you money

If you have health insurance, you may be getting some money back this summer.

Consumers and small businesses will receive an estimated $1.3 billion in premium rebates from insurers that last year failed to meet new federal health care reform standards designed to purge excessive administrative costs and profit-taking from America's health plans.

The new standard, known as the "medical loss ratio," or MLR, requires an insurer to spend at least 80 percent of your premium directly on your medical care if you purchased your own policy, or 85 percent if you're insured under an employer's plan. When those marks are missed, the Affordable Care Act requires the insurance company to refund the difference. The first of these annual rounds of insurance rebates, which cover premiums collected last year, must be issued by Aug. 1.

The latest rebate estimates by the nonpartisan Kaiser Family Foundation are based on an analysis of 2011 premium data that insurers filed with the National Association of Insurance Commissioners.

The Kaiser study projects that nearly one-third (31 percent) of consumers who buy their own insurance will receive rebates, and so will more than a quarter (28 percent) of small businesses that insure their workers. About one-fifth (19 percent) of major employers are expected to get rebates -- $541 million worth.

"In total amounts, the large-group market is expecting the most rebates, but that is because that's the way most people receive private insurance," says Cynthia Cox, a Kaiser fellow and co-author of the study. "If you look at it per person, those who buy insurance on their own can expect some of the highest rebates."

How much can you expect? The study estimates that enrollees in the individual market will receive rebates of $127, on average. Small businesses will get rebates averaging $76 for each enrolled employee, and big businesses will receive an average of $72 per enrollee. The largest rebates are expected in Texas ($186 million) and Florida ($149 million). Hawaii is the only state where no insurer will be required to issue a rebate.

Kaiser says businesses that receive insurance rebates will, in some cases, pass the money on to employees.

Brian Chiglinsky, spokesman for the federal Centers for Medicare & Medicaid Services, says rebates will be issued by check or as a credit toward the next premium.

"In either case, it will be accompanied by a letter that explains what the MLR is, what their rate was and why the company didn't meet it," he says. "Companies that do meet the MLR standard should also send a notice that explains MLR and says, 'We've met this standard, so you're getting fair value for your premium dollar.'"

While consumers are likely to welcome the rebates, the MLR program is really designed to punish insurers that spend too much on things such as overhead and executive bonuses.

"Yes, consumers should feel great to get some money back," says Chiglinsky. "But they should bear in mind that it's money they should not have been charged in the first place." He adds that the MLR results, which will be posted on Healthcare.gov this fall, should help consumers shop for insurance offering the best value once the new state health exchanges open in 2014.

Health insurers are not thrilled with the insurance rebates program, to put it mildly, according to Robert Zirkelbach, spokesman for America's Health Insurance Plans, an industry trade group.

"MLR is the absolute wrong way to get health care costs under control," he says. "Instead of focusing on what the data shows is the real driver of rising health insurance premiums, which is underlying medical costs, it is capping health plan administrative costs, which have been consistent for about the last decade. "

Deborah Chollet, a senior fellow at Mathematica Policy Research in Washington, D.C., says some rebates may be the result of foot-dragging by insurers in the 26 states challenging the health care reform law in the Supreme Court.

"Some carriers in those states are kind of in denial about the Affordable Care Act," she says. "They've known where they stood on these rebates since last fall. They're busy now calculating good 2013 premiums."

Chollet, who is helping states set up the new health exchanges, says the MLR program and its insurance rebates were designed to put the onus on insurers to find other profit streams, ideally by renegotiating with service providers to lower health care costs.

"I think what HHS (the Department of Health and Human Services) is saying is: 'This shouldn't be the consumer's problem, it should be the insurance company's problem,'" she says. "Their much-lauded nimbleness needs to come into play now."

Will the MLR test stand if the Supreme Court rules against the health care reform law?

"That is the multibillion-dollar question," says Chollet, "and I don't see anybody placing bets these days."

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Affordable Care Act forces health insurance companies to actually spend money on medical care

Current TV correspondent Jacki Schechner helps uncover how Obama's Affordcable Care Act does may force health insurance companies to give U.S. citizens a billion-dollar rebate thanks to the Medical Loss Ratio's 80-20 rule
Tune in Weeknights at 7:00/6:00c on Current TV
http://current.com/shows/the-young-turks/

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Health, money, power on the line

Supreme Court to tackle health carevar cnnWindowParams=window.location.toString().toQueryParams();if(typeof cnnWindowParams.video!="undefined"){if(cnnWindowParams.video){cnnLoadStoryPlayer('bestoftv/2012/03/23/pkg-bolduan-health-care-scotus.cnn','cnnCVP1', '640x384_start_art' ,playerOverRide,T1);}} else {$('cnnCVP2').onclick=function(){if ($$('.box-opened').length){$$('.box-opened').each(function(val){Element.fireEvent(val,'click');});}cnnLoadStoryPlayer('bestoftv/2012/03/23/pkg-bolduan-health-care-scotus.cnn','cnnCVP1','640x384_start_art',playerOverRide,T1);};$('cnnCVP2').onmouseover=function(){$('cnnCVP2').className='cnn_mtt1plybttn cnn_mtt1plybttnon';};$('cnnCVP2').onmouseout=function(){$('cnnCVP2').className='cnn_mtt1plybttn';};}Court prepares to tackle perhaps the most important appeals to reach it in more than a decadeRulings could establish precedents in regulation over a range of social areasSCOTUSblog editor: "The implications ... are impossible to overstate"Constitutionality of the reform's individual mandate is a key point of the case

Washington (CNN) -- Most of us go about our daily business never thinking about the U.S. Supreme Court or the cases it decides. But sometimes, it gets a case so big -- and could affect your life so much -- you simply have to take notice. This week is one of those times.

The highest court in the land is preparing to tackle perhaps the most important appeals to reach it in more than a decade: the massive health care reform legislation championed by President Barack Obama.

The court will soon hear six hours of oral arguments over three days on the law's constitutionality -- and your health and your finances could be on the line. Their eventual rulings in an election year will not only guide how every American receives medical care but would also establish precedent-setting boundaries of government regulation over a range of social areas.

"The implications in the health care litigation are impossible to overstate," said Thomas Goldstein, a prominent Washington attorney and publisher of SCOTUSblog.com. "It has tremendous consequences for President Obama's re-election because it's a signature achievement. But in terms of law, this case is really going to decide how much power Congress has to regulate spheres that we've often thought of as the jobs of the states or of just individuals."

A century of federal efforts to offer universal health care culminated with the 2010 passage of the Patient Protection and Affordable Care Act. After months of bare-knuckled fights over politics and policy, the legislation signed by Obama reached 2,700 pages, nine major sections and 450 some provisions.

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The partisan debate around such a sweeping piece of legislation has encompassed traditional hot-button topics: abortion and contraception funding, state and individual rights, federal deficits, end-of-life-care and the overall economy. The high court now gets the final word.

"These issues are really central to whether the federal government can regulate anything it wants to, or whether there are some things that only the state governments can regulate," said Paul Clement, the attorney who will argue against the law, on behalf of a coalition of 26 states.

On the other side are progressives who back the Obama administration and its congressional supporters.

"Congress thought it necessary to regulate the nearly 20% of our nation's economy that makes up the health care industry and to make sure insurance companies did not discriminate against people with pre-existing conditions, for example," said Elizabeth Wydra, chief counsel at the Constitutional Accountability Center. "That is squarely within Congress' authority."

Your guide to the arguments

Debate comes down to four key issues

Despite its complexity, the high court has narrowed its focus to just four key issues:

One: Constitutionality of the individual mandate (also known as the "minimum coverage" requirement), the key funding provision.

Two: Whether the individual mandate is a "tax," thereby limiting authority of the courts to immediately decide the mandate question.

Three: Whether other parts of the law can survive if the mandate is struck down.

Four: Federal vs. state conflict over expansion of the cooperative Medicaid program.

It is the "individual mandate" that has sparked the most controversy. It requires nearly every American to purchase some level of insurance or face a tax penalty of up to about $700 a year.

Typical of the ideological divide, the opposing sides do not even agree on what the individual mandate was designed to accomplish. Supporters see it a way of spreading health care costs to a larger pool of individuals, ensuring affordable, quality medical care. They say regulating commerce and the economy has long been a federal prerogative.

Health law supporter: 'It really is going to help the American public'

The Justice Department will tell the high court that since every American will need medical care at some point in their lives, individuals do not "choose" to participate in the health care market. Federal officials cite 2008 figures of $43 billion in uncompensated costs from the millions of uninsured people who receive health services, costs that are shifted to insurance companies and passed on to consumers.

Health law opponent: 'Congress made a bad situation worse'

But opponents see a fundamental constitutional violation, an intrusion into citizens' personal lives, forcing Americans to purchase a commercial product they might not want or need. The states equate such a requirement to a burdensome regulation of "inactivity."

One federal appeals court has found the act unconstitutional. Two others have has said it is a proper exercise of congressional mandate. A third court has ruled against the states on technical grounds, saying local officials lack authority to even go into to court and argue the individual mandate issue. Twenty-eight states and countless individuals and groups have sued the administration.

What the reform is designed to do

Health care reform, a top Democratic priority since the Truman administration, was passed by the previous Congress in a series of close party-line votes. Obama signed the act into law in March 2010.

Among other things, the measure was designed to help millions of uninsured and underinsured Americans receive adequate and affordable health care through a series of government-imposed mandates and subsidies. The federal government will tell the court that 45 million Americans last year lacked health insurance, roughly 15% of the country's population.

Critics have equated the measure to socialized medicine, fearing that a bloated government bureaucracy will result in higher taxes and diminished health care services.

Opponents derisively labeled the measure "Obamacare." Republican leaders, who captured the House of Representatives in the 2010 midterm elections, have vowed to overturn or severely trim the law. All the major GOP candidates for president have echoed similar calls, especially in their TV campaign ads. That has concerned some liberal legal analysts.

"It seems what the conservative state attorneys general and the governors were trying to do was seek a do-over of the act in the courts, to achieve what they couldn't in the legislature. And it really has become a bit of political theater," says Wydra. "If the Supreme Court and especially some of the conservative justices uphold the mandate, and deliver the message to the tea party that their constitutional vision is fundamentally flawed, that makes it much harder for tea party candidates and their supporters to have their constitutional theories taken seriously by the American people."

Supreme Court and election-year blockbusters

But the states worry how far the federal government would go in the future, all in the name of regulating "commerce," if the high court found the law constitutional.

"I think about just a couple of years ago when the automobile industry was suffering, and Congress said: we're going to give people incentives to buy new cars," said Clement. "Well, it would have been even more effective and even better for the car industry if Congress had just said: if you make more than $100,000, you need to buy a new car. They haven't done that, maybe it's self-restraint, maybe it's because the [sweeping] power really doesn't exist. That's really what the court is going to decide."

How the justices could rule

The entire court of nine justices will hear the case, despite separate calls for Clarence Thomas and Elena Kagan to recuse. They will have several options before them when issuing opinions in these cases.

They could separately strike down or uphold the individual mandate and Medicaid provisions and rule whether the entire law must be scrapped. Or they could declare a legal "time-out"-- concluding the constitutional questions must be postponed until the major provisions go into effect in 2014, when any real "harm" from the financial mandates would presumably be felt.

Two families, two viewpoints on health reform

The opportunity to rule on a landmark case brings with it precedent-setting opportunities to either expand or deflate not only the power of Congress and the executive but also the judiciary's own prestige and authority. In some ways, it is a perilous path, since the courts have increasingly become a political football.

"We're in a little bit of a political death spiral for the Supreme Court, as ideologues on the left and right attack justices with whom they disagree, maybe decreasing the public's confidence in the Supreme Court," said Scotusblog.com's Goldstein. "And as they take up health care, abortion cases, immigration -- all of those issues -- there are going to be more excuses to attack the justices."

So expect nine unelected judges and the tricky issues such as health care they confront to be major talking points in this year's state and federal elections. Their votes could ultimately decide whom Americans choose on Election Day 2012.

"Our job on the court is to decide -- and control our stress," Justice Stephen Breyer told CNN a couple of years ago while discussing how to manage -- personally and professionally -- the biggest, most politically explosive Supreme Court appeals. "Keep yourself under control. And do your best on the decision."

That's wellness advice that could serve the nine-member bench -- and anyone passionately folllowing the case -- in the days to come.

Read more about the rulings for yourself

The cases are Dept. of Health and Human Services v. Florida (11-398); National Federation of Independent Business v. Sebelius (11-393); and Florida v. Dept. of HHS (11-400). Rulings are expected in June.

updated 5:34 PM EDT, Sun March 25, 2012 The Supreme Court will tackle four major issues during oral arguments Monday through Wednesday.updated 4:45 PM EDT, Sun March 25, 2012 What specific questions will the Supreme Court address? Here's your guide to the arguments updated 7:18 AM EDT, Mon March 26, 2012 Few Americans have any real idea how the Supreme Court operates. Here's your insider's guide.updated 4:52 PM EDT, Sun March 25, 2012 A supporter of the law says people with pre-existing conditions need its protections.updated 4:57 PM EDT, Sun March 25, 2012 An opponent of the law says that some of the most important reforms ended up being cut.updated 5:00 AM EDT, Mon March 26, 2012 Some Supreme Court decisions make a huge election-year splashes.updated 9:30 AM EDT, Sat March 24, 2012 CNN's Lizzie O'Leary explains the winners and losers in the new health care law, with a storybook style.updated 11:48 AM EDT, Fri March 23, 2012 The Supreme Court will hear landmark arguments over the future of health care reform. CNN's Kate Bolduan has a preview.Most popular stories right now

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CrossTalk: Healthy Money?

Should financial products be subject to the same kind of consumer protection and quality control as other products like pharmaceuticals? Virtually every product that can be bought and sold is covered by regulations and often there is issues related to social benefits. The crash of 2008 has demonstrated that the current financial system is rife with social detriment. Or, is finance simply different from other products and markets? CrossTalking with Glen Weyl, Patrick Young and Arnold Kling on March 14.

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Credit-Aid Software - Guaranteed to Increase your Credit Score or your money back!

Credit repair software will help you to increase your credit score fast. Credit-Aid puts the power of a credit repair business into your own hands by using the credit reporting system to your advantage. This software makes repairing your credit as easy as clicking your mouse. The interface is friendly and within minutes a user can obtain free credit reports, generate credit dispute letters written by an attorney, and quickly be on their way to boosting their credit score and keeping it all organized. Credit Repair is not rocket science, you just need to know the rules and how to work the system in YOUR favor. Download a free software demo and a free credit secrets ebook at www.credit-aid.com and start improving your finances today!

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Credit-Aid Software - Guaranteed to Increase your Credit Score or your money back!

Credit repair software will help you to increase your credit score fast. Credit-Aid puts the power of a credit repair business into your own hands by using the credit reporting system to your advantage. This software makes repairing your credit as easy as clicking your mouse. The interface is friendly and within minutes a user can obtain free credit reports, generate credit dispute letters written by an attorney, and quickly be on their way to boosting their credit score and keeping it all organized. Credit Repair is not rocket science, you just need to know the rules and how to work the system in YOUR favor. Download a free software demo and a free credit secrets ebook at www.credit-aid.com and start improving your finances today!

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Credit-Aid Software - Guaranteed to Increase your Credit Score or your money back!

Credit repair software will help you to increase your credit score fast. Credit-Aid puts the power of a credit repair business into your own hands by using the credit reporting system to your advantage. This software makes repairing your credit as easy as clicking your mouse. The interface is friendly and within minutes a user can obtain free credit reports, generate credit dispute letters written by an attorney, and quickly be on their way to boosting their credit score and keeping it all organized. Credit Repair is not rocket science, you just need to know the rules and how to work the system in YOUR favor. Download a free software demo and a free credit secrets ebook at www.credit-aid.com and start improving your finances today!

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Health Insurance 'Mandate' Deemed Best Value for Money

THURSDAY, Feb. 16 (HealthDay News) -- Doing away with the U.S. health care reform act's requirement that all Americans must have health insurance would not dramatically increase the cost of buying policies through new insurance exchanges, but would significantly reduce the number of people who get insurance, according to researchers.

The findings from the RAND Corporation, a nonprofit research organization, are based on estimates created using a computer model. The investigators found that eliminating the so-called "individual mandate" would increase a person's cost of buying insurance by 2.4 percent and reduce the number of Americans who would get new health coverage in 2016 from 27 million to 15 million.

"Our analysis suggests eliminating the individual mandate would sharply decrease coverage, but it would not send premiums into a 'death spiral' that would make health insurance unaffordable to those who do not qualify for government subsidies," study lead author Christine Eibner, an economist at RAND, said in a news release from the organization.

The analysis also found that repealing the individual mandate would greatly increase the amount of government spending for each person newly enrolled in a health insurance plan. The cost would more than double, to $7,468 per person.

"The individual mandate is critical not only to achieving near-universal health care coverage among Americans, but also to yielding a high value in terms of federal spending to expand coverage," Eibner said. "Without the individual mandate, the government would have to spend more overall to insure a lot fewer people."

The U.S. Supreme Court is scheduled to hear arguments in March about the constitutionality of requiring all Americans to obtain health insurance.

More information

The U.S. Agency for Healthcare Research and Quality explains how to get good value when choosing a health plan.

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Money & Politics: Liberate Health Care

Money & Politics: Liberate Health Care

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