Ohio health insurers are refunding more than a million dollars in premiums to small businesses and individuals for 2013, according to a report out Thursday from the Department of Health and Human Services.
This refund is the result of a clause in the Affordable Care Act aimed at limiting the cost of health insurance. The law requires insurers to spend most of the money they take in from premiums on actual care, as opposed to overhead. For individuals and small businesses buying health insurance, that spending ratio is 80 to 20—meaning insurers must spend at least 80 percent on care. If they don’t do that, they owe their customers a refund.
HHS says about $1.2 million dollars in refunds were issued for premiums paid in 2013 in Ohio. The majority of that will go back to employers who purchased small group insurance for over 31,000 consumers; Humana owes $306,945 in that market, and Trustmark Life Insurance owes $470,734. A handful of insurers in the individual market also owe money back—four companies serving about 3,500 people in the state. The largest payments in that area came from John Alden Life Insurance Company, a subsidiary of Milwaukee-based Assurant, with payments to individuals totaling $341,467.
Health and Human Services estimates the average per-family refund in Ohio is $69. HHS estimates that spending on overhead in all market sizes has been declining since the law went into place in 2011.
Lewis Wallace is WYSO's economics reporter and substitute morning host. Follow him @lewispants.