Oh, yay: $500 million in ObamaCare rebates on their way

posted at 9:31 am on June 21, 2013 by Erika Johnsen

If you saw the first television ad campaign on behalf of ObamaCare being put out by the president’s former campaign-turned-”advocacy”group Organizing for Action the other day, the much-touted rebates — from what the Obama administration has so wisely deemed to be “inefficient” health insurers, coming certain consumers’ way soon — will be fresh in your mind. They want to be very sure to keep up appearances about the “affordable” part of the charade and to make sure that Americans know about all of the favors they’re so generously bestowing, you see.

Part and parcel of ObamaCare is the law’s medical loss ratio rule, which requires that health insurers spend at least 80 percent of their collected premiums on actual medical care rather than administrative and other costs (man, what if we held the government to the same efficiency standard?); if not, they are now required to rebate the difference to the consumer. Last year was the first year the regulations were in full effect, and insurers sent out about $1 billion in rebates nationwide; this year, that number looks like it’s going to be about $500 million, per Politico:

Insurers who failed to meet Obamacare efficiency rules will return $500 million to consumers across the country this summer, the Obama administration announced Thursday — but the chunk of change Americans will see depends heavily on where they live.

state-by-state breakdown of where rebates are headed suggests recipients in Washington state will see the biggest checks, with 3,000 consumers due to receive rebates of more than $500 each. Rhode Islanders will see the least per person, with an average of $43 in rebates slated for 1,265 plan holders.

The bulk of the rebates are headed to California, where 1.4 million people will receive rebates averaging $71 each, and Texas, where 726,000 residents are due checks averaging $95.

ObamaCare supporters and Democrats are already hailing the forthcoming rebates as evidence of the law’s effectiveness in dealing out transparency, efficiency, and general peace and justice everywhere, but there’s a bit of a problem with the law’s logic. Peter Suderman explained it at Reason last fall:

Why are economists so sour on the provision? The worry is that rather than look for ways to control costs, insurers will simply let spending balloon, leading to higher premiums — and bigger profits. It’s easier to cover someone’s health costs on 80 percent of $1,000 than it is on 80 percent of $100. And because insurer profits and other administrative costs must come from the remaining 20 percent, there’s a larger pool from which to draw profits and business expenses.

And sure enough, as the Heritage Foundation outlined this week:

Claim: “$150 Average Rebate in 2012”

Fact: This talking point refers to Obamacare’s medical-loss ratio provision, which imposes price controls on insurance companies, forcing them to pay rebates to consumers if they do not meet Obamacare’s arbitrary standards. The Kaiser Family Foundation reported last yearthat rebates would be issued to plans covering 3.4 million people, or only about 1 percent of the population. The Kaiser report admitted that the rebates “are not particularly large in many instances.” While candidate Obama promised that premiums would go down by $2,500 by the end of his first term, the average employer premium has actually gone up by $3,065—from$12,680 in 2008 to $15,745 in 2012, according to Kaiser data.

But of course, as Suderman said, a check in the mail is much more easily visible than cost restraint. Thanks, ObamaCare!


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Second look at a one way trip to Mars?

rbj on June 21, 2013 at 9:38 AM

This ought to give me back about 10% of the rate increases I’ve had since Obamacare passed.

Mark1971 on June 21, 2013 at 9:40 AM

What a boondoggle

cmsinaz on June 21, 2013 at 9:41 AM

Oh, yay: $500 million in ObamaCare rebates on their way

Or 5 presidential trips to Africa..

Electrongod on June 21, 2013 at 9:41 AM

Awesome. If this works, I am naming my next ponzi scheme or smuggling vehicle “Barack”!

Seriously, I just showed my econ guy a way this could work out.

His head exploded.

IlikedAUH2O on June 21, 2013 at 9:41 AM

While candidate Obama promised that premiums would go down by $2,500 by the end of his first term, the average employer premium has actually gone up by $3,065

Loser Dog Eating Thug promised a lot of things and the only one that came true was that our energy prices are skyrocketing.

But no matter, half the country is deranged and would happily vote for the Dog Eating Human Lice again if the opportunity afforded itself, and every single one of them will brush this off as Tea Party propaganda.

Bishop on June 21, 2013 at 9:42 AM

“$150 rebate in exchange for $3000 premium increase for the win baby!!!”….putting the TARD in Libtard every day…

hillsoftx on June 21, 2013 at 9:42 AM

And that pic infuriates me, two pompous aholes laughing it up like it’s no big deal. The two of them combined couldn’t sweep out my shop without managing to somehow start the nearby lake on fire, yet they’re overseeing the healthcare of 300 million Americans.

How did it come to this, the stupidest people in our society running the entire show; what a terrible thing we’ve done with the great gift given to us by the Founders.

Bishop on June 21, 2013 at 9:47 AM

Oh, yay: $500 million in ObamaCare rebates on their way

Or 5 presidential trips to Africa..

Electrongod on June 21, 2013 at 9:41 AM

How much did the “Lemme Offend and Bore Europeans” trip cost?

So maybe 3 presidential trips to Africa, 1 trip to Europe, A fleet of 12 Canadian buses…etc.

workingclass artist on June 21, 2013 at 9:55 AM

…recipients in Washington state will see the biggest checks…

Now there’s a sentence you could recycle indefinitely.

mudskipper on June 21, 2013 at 9:56 AM

Fact: This talking point refers to Obamacare’s medical-loss ratio provision, which imposes price controls on insurance companies, forcing them to pay rebates to consumers if they do not meet Obamacare’s arbitrary standards.

They’re forgetting to factor in the insurance-loss ratio, or what happens when all the insurance companies fold rather than hand over free money to the gubmint.

fogw on June 21, 2013 at 9:59 AM

Obamacare ……………… an udder and I mean udder failure. Everyone is racing for a tit to suck on. The cost projections are grossly underestimated, as are all government programs, state and federal.

SC.Charlie on June 21, 2013 at 10:00 AM

And that pic infuriates me, two pompous aholes laughing it up like it’s no big deal. The two of them combined couldn’t sweep out my shop without managing to somehow start the nearby lake on fire, yet they’re overseeing the healthcare of 300 million Americans.

How did it come to this, the stupidest people in our society running the entire show; what a terrible thing we’ve done with the great gift given to us by the Founders.

Bishop on June 21, 2013 at 9:47 AM

Yeah…It’s incomprehensible and demoralizing.

How have we allowed tiny obnoxious grievance minorities to demand with tantrums legislation wrought with fraud and is clearly anti-constitutional…How have we surrendered to being quasi Europe?

It’s like being held hostage by angry toddlers on Meth.

workingclass artist on June 21, 2013 at 10:00 AM

They’re forgetting to factor in the insurance-loss ratio, or what happens when all the insurance companies fold rather than hand over free money to the gubmint.

fogw on June 21, 2013 at 9:59 AM

Nor did they factor for the “profit to earnings” ratio which means uh….uh…well it means something and it’s important. Let’s hit the links.

Bishop on June 21, 2013 at 10:02 AM

How economically ignorant are Democrats?

It’s complete and total; now minor stupidities are being touted as victories, while major stupidities, like the auto bailout, Energy Department venture capital investing in favored donors pipe dreams or the damn stimulus, are quietly flushed from memory.

Not a single thing, absolutely nothing, ever goes right with the skunks and yet LIV are stupidly unaware.

MTF on June 21, 2013 at 10:03 AM

I got one of these checks last year. It was for $8.52. I threw it away.

Defenestratus on June 21, 2013 at 10:04 AM

How much did the “Lemme Offend and Bore Europeans” trip cost?

workingclass artist on June 21, 2013 at 9:55 AM

First you need to figure the cost for Mooch’s 12 personal assistants, each with their own hotel suite and a generous amount of “walking around money”…

There is nothing to good for Mr. and Mrs. Grifter.

Bishop on June 21, 2013 at 10:06 AM

Part and parcel of ObamaCare is the law’s medical loss ratio rule, which requires that health insurers spend at least 80 percent of their collected premiums on actual medical care rather than administrative and other costs (man, what if we held the government to the same efficiency standard?)

Good point, but using terms like ‘efficiency’ or ‘productivity’ wrt to government is meaningless, since they do not create anything or increase the value of anything. Government is a deadweight that the rest of the economy has to drag around like a leg iron.

slickwillie2001 on June 21, 2013 at 10:14 AM

workingclass artist on June 21, 2013 at 9:55 AM

…and a partridge in a pair tree…

What?

Wrong season?

Optics…for the low-information stupid as hell voters who foisted this travesty (Obama or Obamacare or both) on the citizens of these once United States….optics, that all this is.

Who is going to pay for the rebates?

You.

Me.

Every other taxpayer or used of any medical facility.

The majority of Obama voters?

Won’t be paying a penny.

coldwarrior on June 21, 2013 at 10:14 AM

Charge them $22,000 a year then give them a $25.00 rebate. Unfortunately, the low information slugs will undoubtedly think this is a great deal.

rplat on June 21, 2013 at 10:15 AM

The Queen of Death and President Abortion. What lovely people.

22044 on June 21, 2013 at 10:15 AM

I think I should get a rebate from the ObamaCare funds in an amount that would make my insurance premiums $2,500 less this year.

A promise is a promise, isn’t it?

BobMbx on June 21, 2013 at 10:16 AM

pair tree? Pear….sh*t…too early in the morning.

coldwarrior on June 21, 2013 at 10:17 AM

How did it come to this, the stupidest people in our society running the entire show; what a terrible thing we’ve done with the great gift given to us by the Founders.

Bishop on June 21, 2013 at 9:47 AM

By design. Free stuff wins elections.

BobMbx on June 21, 2013 at 10:19 AM

Yaaa! More free money. Now bend over while I scan your emails and phone records.

Kissmygrits on June 21, 2013 at 10:20 AM

I got one of these checks last year. It was for $8.52. I threw it away. – Defenestratus on June 21, 2013 at 10:04 AM

Do you realize that money is taxable under other income, if you did itemize and used the medical deduction. It is also taxable if you are self-employment and deducted it on page one of your 1040. Ain’t the tax code wonderful.

SC.Charlie on June 21, 2013 at 10:21 AM

$500 million

$500 million would barely cover one year’s worth of Brazilian Waxing for Big Mo.

Pork-Chop on June 21, 2013 at 10:33 AM

So we get $1.42 each? Fabulous.

Hucklebuck on June 21, 2013 at 10:33 AM

Just to back up empirical data with an anecdotal story, I’m an IT consultant so I have an individual plan through BCBS. Last year, I received a $120 rebate check, then my MONTHLY premium went up $150.

BohicaTwentyTwo on June 21, 2013 at 10:36 AM

Increased Demand + Limited Price = Shortage, Also: 2+2=4

RadClown on June 21, 2013 at 10:36 AM

What, no applauding pony-tail doc?

Chuckles3 on June 21, 2013 at 10:41 AM

Does the overhead burden of accounting for the new efficiency standard count in the efficiency standard?

TexAz on June 21, 2013 at 10:45 AM

Kinda like the ‘progressive’ thug flipping you fifty cents for bus fare after he mugs you.

TimBuk3 on June 21, 2013 at 10:47 AM

BohicaTwentyTwo on June 21, 2013 at 10:36 AM

A lousy $30 to cover the 20 million illegals and folks who never had coverage?

Thanks for taking care of it.

IlikedAUH2O on June 21, 2013 at 10:51 AM

Hucklebuck on June 21, 2013 at 10:33 AM

Less 46 cents postage…we’ll pay for that somewhere.

coldwarrior on June 21, 2013 at 11:05 AM

Per HHS:

Created through the Affordable Care Act, the rule requires insurers to spend at least 80 cents of every premium dollar on patient care and quality improvement. If they spend a higher amount on other expenses like profits and red tape, they owe rebates back to consumers.

When investor returns are viewed by government as an expense, then you have economic tyranny. They’re basically saying that shareholders no longer control the company, and it has become a de-facto government entity. Setting profits without regard to risk or opportunity costs will raise premiums, chase away investors and eventually collapse the private insurance industry. It’s failure by design.

RadClown on June 21, 2013 at 11:16 AM

Second look at a one way trip to Mars?

rbj on June 21, 2013 at 9:38 AM

EOT

RedNewEnglander on June 21, 2013 at 11:22 AM

Claim: “$150 Average Rebate in 2012”

Fact: This talking point refers to Obamacare’s medical-loss ratio provision, which imposes price controls on insurance companies, forcing them to pay rebates to consumers if they do not meet Obamacare’s arbitrary standards. The Kaiser Family Foundation reported last yearthat rebates would be issued to plans covering 3.4 million people, or only about 1 percent of the population. The Kaiser report admitted that the rebates “are not particularly large in many instances.” While candidate Obama promised that premiums would go down by $2,500 by the end of his first term, the average employer premium has actually gone up by $3,065—from$12,680 in 2008 to $15,745 in 2012, according to Kaiser data.

So a person pays $3,065 more for insurance and gets a check for $150, or maybe $500 in Washington State. On average, a return on investment of -95.1%. Maybe a little better than Solyndra, but most people would prefer playing roulette in Vegas.

Steve Z on June 21, 2013 at 11:23 AM

Charge them $22,000 a year then give them a $25.00 rebate. Unfortunately, the low information slugs will undoubtedly think this is a great deal.

rplat on June 21, 2013 at 10:15 AM

If you ask the average low-information voter “how much did you pay in income taxes last year?”, they will tell you the amount they underpaid in their 1040 filing or the amount of refund they got.

slickwillie2001 on June 21, 2013 at 11:30 AM

but most people would prefer playing roulette in Vegas.

Steve Z on June 21, 2013 at 11:23 AM

Or roulette in the salons of old Petrograd. Gospodin, vere is my Nagant???

coldwarrior on June 21, 2013 at 11:31 AM

SIGH.

losarkos on June 21, 2013 at 11:53 AM

I won’t forget the senate and those lefty dem leaders that rubber stamp Obama sh%*

losarkos on June 21, 2013 at 11:53 AM

If you’re under 30, you’ll be getting hosed by the insurance act so do as a former First Lady said on a different subject, “Just say no…” to health insurance. You don’t need it. It’s the new “civil disobedience.”

There aren’t going to be enough IRS agents to collect all of the fines and even if there were, it’ll be way cheaper than the thousands of dollars due annually for insurance that you don’t need. What you should be demanding is major-medical-only insurance, or premiums that match the cost demographic of your age group. The ACA is a typical scheme invented by people who don’t believe in an open market, who think they can, in their superior wisdom, force the market to comply with their social engineering wishes. The European experiment in this futile effort is failing badly, as will the ACA.

stefano1 on June 21, 2013 at 12:47 PM

Fort Wayne, IN – local newspaper article states that parking fees for events at the Coliseum will increase, necessarily, due to higher expected insurance expense for their employees as a result of the Affordable Care Act. Passenger cars increase from $4 currently up to $5; and RV’s and buses from $12 currently up to $15. We are a pretty conservative town. Thankfully so. Most cities wouldn’t be so truthful and place blame where blame is due.

HoosierStateofMind on June 21, 2013 at 1:01 PM

This law has been smoke and mirrors since the beginning and will continue to be that until Obama is out of office. It’s a pity that Chief Justice Roberts didn’t do the right thing. I’d love to know what Obama had on him. Was it the IRS? Was it the NSA? Was it the DOJ? Somebody had to have something on Roberts to get him to rule the way he did. He probably felt solace, due to the fact that there was an election coming up. Too bad he didn’t realize that was fixed also. I wonder what would happen if the Supremes got to rule on that election, would Roberts be in the tank for Obama again?

bflat879 on June 21, 2013 at 1:13 PM

Kansas really sucks. It really, really does.

Thanks for the witch that destroyed healthcare and made sure that we can abort 4th trimest babies and pay for it with our tax dollars.

acyl72 on June 21, 2013 at 2:16 PM

500 million, huh? Sure glad we spent a trillion on that.

The Schaef on June 21, 2013 at 2:45 PM

Oh, yay: $500 million in ObamaCare rebates on their way

Minus $100 million in taxes…

Dr. ZhivBlago on June 21, 2013 at 2:58 PM

Picturing Sebelius and Obama always reminds me of a remark slipped out by one of the mouthpieces on MSNBC. He commented that Obama was golfing with Kathleen Sebelius that day. Hmmm. Would like to see some pictures from that!

Then he said that it was unusual because he “doesn’t usually play with girls” – or some phrase like that. I almost choked on my oatmeal! What could he possibly mean?

I always wondered about these endless, undocumented golf outings, that seem to not improve his game. Perhaps it is just a euphemism for “private meeting, press not permitted”?

virgo on June 22, 2013 at 2:08 PM