Insurers to Pay Rebates to 12.8 Million Under Health Law

About 12.8 million Americans will get rebates averaging $151 from their health insurers, the U.S. government said today in its latest announcement touting the 2010 health-care law.

The law, which is being weighed by the Supreme Court this month, limits to 20 percent the proportion of revenue from premiums that insurers can keep for profits and administrative expenses. Any excess has to be refunded to customers.

The rule “helps ensure consumers get fair value for their health care dollar,” Health and Human Services Secretary Kathleen Sebelius said in a statement.

Companies including UnitedHealth Group Inc. (UNH) and WellPoint Inc. (WLP) will pay a total of $1.1 billion in rebates on 2011 policies, the government said.

Earlier this week, Sebelius touted an expansion of insurance to people under age 26, who were able to stay on their parents’ policies because of the law. About 3.1 million young adults who would otherwise be uninsured gained coverage because of the provision, HHS said.

She also announced new grants yesterday to community health centers, government-funded clinics intended to provide care in areas with few health resources. The health law provided $11 billion for the centers, which HHS said have hired 25,300 people since President Barack Obama took office.

Twenty-six states and a small business group, the National Federation of Independent Business, have challenged the law in court over its requirement that most Americans carry insurance. The Supreme Court is deciding whether the requirement is unconstitutional, and if so, whether the entire law will be struck down. A decision is expected by the end of the month.

To contact the reporter on this story: Alex Wayne in Washington at awayne3@bloomberg.net

To contact the editor responsible for this story: Reg Gale at rgale5@bloomberg.net

Press spacebar to pause and continue. Press esc to stop.

Bloomberg reserves the right to remove comments but is under no obligation to do so, or to explain individual moderation decisions.

Please enable JavaScript to view the comments powered by Disqus.