The Affordable Care Act, $1.3 Billion in Medical Insurance Rebates, and the U.S. Supreme Court

Under the Affordable Care Act's medical loss ratio rule, if medical insurers don't spend at least 80 to 85 percent of their premium earnings on health care — rather than on marketing and administrative expenses — they must rebate the excess non-health care spending to their consumers. (Sometimes those consumers will be individuals; other times, they will be employers who purchased health care for their employees.) According to this analysis by the Kaiser Family Foundation, the ACA will require health insurers no later than August 1 to rebate about $1.3 million in excess premiums -- $541 million to large employers, $377 million to small businesses, and $426 million to individuals who buy their own health insurance. Some rebates will take the form of premium reductions, while others will be direct cash payments. But if the Supreme Court strikes down the whole Act -- that is, if it finds some of it unconsitutional and then refuses to save the rest of it -- presumably the rebates will stay in the insurers' pockets. Read more about the issue here and here.