Health insurance rebates decline this year

Administration says consumers now save up front as insurers get efficient to avoid refunds

Associated Press

WASHINGTON (AP) -- Those health insurance rebates that some consumers got last year will total much less for 2013, but the Obama administration says that's a good thing.

The Health and Human Services Department announced Thursday that employers and individual policyholders will receive $500 million in rebates this summer. It's half the $1.1 billion returned last year.

But Health and Human Services' Gary Cohen says the lower rebates mean insurance companies have learned to be more efficient, and consumers are saving up front.

President Barack Obama's health care law requires insurers to spend at least 80 cents of every premium dollar on medical care and quality improvement or refund the difference.

The administration said consumers saved $3.4 billion up front in 2012. Cohen acknowledged the rebate rule may not be the only reason.

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