In the years preceding passage of The Affordable Care Act, it was often argued that for profit health insurers needed to be reined in from the practice of spending 40-50% of every premium dollar on administrative fees; particularly, ‘outrageous’ salaries for management.

As a result, The ACA included medical loss ratio rules requiring insurers to pay out at minimum 80% of premiums for member claims, in their small group and individual segments. Anything less would have to be returned in the form of rebates.

Interesting choice of words, since ‘rebates’ by agents and insurers are illegal. But, I digress.

This is the month when health insurers start paying out their 2020 rebates.

Yesterday one insurer announced they’ll be sending out checks for over $145 million later this month.

Makes for a nice headline, but before you start planning on how to spend the money, consider that number will be paid out over roughly 53 ‘markets’ in multiple states. And then, thousands of members within each market.

Maybe this will help. Did you get a few bucks last year?

Well, this year’s payout is down 20%.

Certainly not enough for Paul Revere to saddle up Brown Beauty!