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InsureBlog: Riddle Me This: Health Insurance Premiums

by Insuredwell
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This is a fair question, and I’ve been thinking about it, as well.

My initial thought was that it was a matter of logistics; that is, many folks share the cost with either their employer (group plans) or their fellow citizens (subsidized ACA plans). So peeling that back, how does a carrier track this?

As co-blogger Patrick (and reader/commenter ‘farmbellpsu‘) points out, at least one carrier is giving it a go:

UnitedHealth commits $1.5 billion for premium rebates … Members will receive a 5% to 20% premium credit on their June billing statements.”

This applies to their individual major medical (one presumes this does not include Short Term Medical) and small group plans. As with various other carriers, they’re also waiving cost-sharing (deductibles and co-pays) for certain expenses.

There are, of course, some issues with this plan, notably MLR (Minimum Loss Ratio) rebates required under ObamaCare. UHC has indicated that this new endeavor is not related to that requirement.

The primary driving factor here is that “surgical volumes and non-Covid-19 emergency room visits in April down 40% or more from a year ago, which is more than offsetting increased costs on coronavirus care and expenses.”

Okay, so if that’s true, then what’s the problem with carriers offering to refund premiums?

Let’s circle back to my reply to Joe’s Tweet, which was that it’s going to be very difficult for carriers to differentiate who gets what. And as co-blogger Patrick also points out:

The relief is being questioned as it is similar to MLR rebates. Meaning, if an employer gets funds back they may be required to share in the refund with employees who have had money deducted from payroll.”

But there are, in fact, more layers. Our friend, Healthcare Economist Michael Bertaut, had this rejoinder:

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