Delaware Insurance Customers to Get Refunds

Over 5,000 Delawareans will share in $734,278 after five health insurance companies failed to meet a federal benchmark that ensures companies spend money on quality health care.

Under the Affordable Care Act, insurance companies can spend no less than 80 percent of premiums on medical care in the small and individual market, and no less than 85 percent in the large group market. Insurance firms must report their spending on health care, and costs for administration.

Failure to abide by the so-called 80/20 rule forces a refund by Aug. 1. The U.S. Department of Health and Human Services said insurance companies nationwide owe 6,816,423 consumers rebates, amounting to over $332 million. HHS said 5,886 Delaware consumers will receive rebates, totaling $734,278. Delaware insurers had to pay $1,846,989 to 5,639 consumers in 2011, and $1,361,054 to 4,096 consumers in 2012.

Wayne Smith, president of the Delaware Healthcare Association, said the 80/20 rule seems to be effective. Read More