It’s rebate time! One of the geekier aspects of Obamacare is that it allows insurance companies to spend no more than a maximum of 20% on overhead costs (15% for large group plans). The rest of your premium dollars have to be spent on actual healthcare. This part of the law went into effect on January 1, which means that starting soon, any insurance company that spends more than 20% on overhead has to send out rebates to customers.
But here’s the election-year angle on this. Not only do insurance companies have to send out rebates to lots of people, they have to tell them exactly why they’re getting the rebates. Here are the first two sentences of the letter as mandated by HHS:
This letter is to inform you that you will receive a rebate of a portion of your health insurance premiums. This rebate is required by the Affordable Care Act — the health reform law.
The checks aren’t huge. The Kaiser Family Foundation estimates that individuals will receive an average of $127, though the average amount will be over $200 in some states. The average rebate in small and large group plans will be smaller, but a fair number of people will receive rebates over a hundred dollars.
Does this matter? Maybe a little bit. I’d guess that it depends on whether the Obama campaign decides to make healthcare a significant talking point this year. If they do, this will have an effect. If they decide to duck the issue, it probably won’t.
