The Affordable Care Act Gets Real

It’s been obvious since the enactment of the Patient Protection and Affordable Care Act of 2010 that opponents had a “window” for seeking its repeal during which its most important and beneficial provisions would not have yet taken place. A handful of provisions from which some citizens have already benefitted–e.g., allowing children to remain on their parents’ health insurance policies longer, and a one-time rebate for people affected by Medicare Part D’s “doughnut hole”–have already taken effect. The biggies–the individual mandate, the introduction of the exchanges, the new federal subsidies, the bans on health-condition denials and preexisting condition exclusions, the introduction of community rating, the Medicaid expansion–come later, mostly at the end of 2013

But a few provisions kick in between now and then, and as Steve Benen has explained, one quite tangible one is the so called “medical loss ratio” rebates that insurers are expected to mail out by August 1 to an estimated 16 million Americans (a majority, actually, via their employers). The rebates are required whenever less than 80% of premiums are ultimately spent on actual health care, as opposed to advertising, lobbying, executive salaries, or other major “overhead” costs.

A Kaiser Foundation estimate is that the initial rebates under this rule will amount to $1.3 billion, with the rebates averaging $127. The number of people benefitting in various states will differ significantly. Mark Halperin has come up with estimates that 1.7 million people will benefit in Florida; just over a million in Pennsylvania; 642,000 in Virginia; and 511,000 in Colorado.

The checks will not, of course, go out if the entire ACA is declared unconstitutional by the U.S. Supreme Court in June or July. If the checks do go out, you can add the medical loss ratio rebates, or as some call it the 80/20 Rule, to the list of popular items that Congress is going to be under considerable pressure to resurrect next year.

Ed Kilgore

Ed Kilgore, a Monthly contributing editor, is a columnist for the Daily Intelligencer, New York magazine’s politics blog, and the managing editor for the Democratic Strategist.