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CA Department of Insurance

Insurance Commissioner Dave Jones Announces Health Insurance Rebates For California Policyholders

News: 2012 Press Release

For Release: July 31, 2012
Media Calls Only: 916-492-3566
Insurance Commissioner Dave Jones Announces Health Insurance Rebates For California Policyholders

Insurance Commissioner Dave Jones announced today that approximately 1.9 million Californians will receive health insurance premium rebates by August 1st. Californians will receive a total of $73.9 million in premium rebates from their health insurers. For those policyholders entitled to a rebate, the average refund or credit totals $65 per family.

The rebates are the result of a provision of the Affordable Care Act (ACA) requiring health insurers in the individual and small group markets to have a Medical Loss Ratio (MLR) of 80 percent or higher. For the large group market (51 or more employees), the Medical Loss Ratio requirement in the ACA is 85 percent or higher.

On the night of his inauguration in January 2011, Commissioner Jones issued an Emergency Regulation to ensure he had the authority to enforce the new MLR requirement in the individual market in California - a move that mandated health insurers spend at least 80 percent of the health insurance premium dollars they collect for healthcare, as opposed to insurer profits, marketing and overhead. Last year, Commissioner Jones also sponsored state legislation - SB 51 (Alquist), which incorporated the MLR standard from the ACA into state law for the group markets.

"The health insurance premium rebates are another important benefit of the Affordable Care Act," Commissioner Jones said. "The Affordable Care Act requires that more of our health insurance premium dollars be spent providing health care, rather than on administrative costs and profits."

Rebate breakdown by health insurers regulated by the California Department of Insurance (CDI):

  • Blue Shield of California Life & Health Insurance Company: $10.8 million rebate to policyholders in the individual market; approximately 239,595 subscribers impacted; $45.15 average rebate per subscriber;
  • Kaiser Permanente Insurance Company: $277,034 rebate to policyholders in the individual market; approximately 21,823 subscribers impacted; $12.69 average rebate per subscriber;
  • Connecticut General Life Insurance Company (CIGNA):$3.4 million rebate to employers in the large group market; approximately 89,575 subscribers impacted; $37.70 average rebate per subscriber;
  • Anthem Blue Cross Life and Health Insurance Company: $1.3 million rebate to policyholders in the individual market; approximately 407,429 subscribers impacted; $3.16 average rebate per subscriber;
  • Aetna Life Insurance Company: $3.4 million rebate to employers in the large group market; approximately 84,428 subscribers impacted; $40.50 average rebate per subscriber;
  • PacifiCare Life and Health Insurance Company: $789,615 rebate to employers in the large group market; approximately 63,600 subscribers impacted; $12.42 average rebate per subscriber.

The California Department of Insurance is also in the process of conducting an audit of the largest six health insurers in California, as well as some smaller insurers to verify the accuracy of the data they provided about medical expenses, administrative costs and profits.

"We will continue to take any and all necessary steps to ensure that health insurers are complying with the law," Commissioner Jones said. "The Department of Insurance is auditing the health insurers to make sure that consumers who are entitled to rebates receive the full amount they are owed."

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The California Department of Insurance, established in 1868, is the largest consumer protection agency in California, regulating the $123 billion insurance marketplace. In 2013 the California Department of Insurance received more than 170,000 calls from consumers and helped recover over $63 million in claims and premiums. Please visit the Department of Insurance web site at www.insurance.ca.gov. Non-media inquiries should be directed to the Consumer Hotline at 800.927.HELP or 213.897.8921. Telecommunications Devices for the Deaf (TDD), please dial 800.482.4833.

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