More than 3 million individual policyholders will reap rebates of $426 million, averaging $127 apiece. These are consumers who are not covered through an employer and buy their policy directly. Consumers in Texas, Oklahoma, South Carolina and Arizona are most likely to be eligible.
Insurance companies must notify policyholders, and the rebates are due by Aug. 1. Some companies have already begun to pay.
In the small-employer market, plans covering nearly 5 million people will receive rebates totaling $377 million.
Employers do not have to pass their rebates on to workers, and can also take them as a discount on next year’s premiums.
According to projections made last year by the Texas Department of Insurance, of the 34 Texas carriers subject to the Patient Protection and Affordable Care Act rule that they spend no more than 20 cents of every premium dollar collected on administrative expenses, 23 will pay rebates based on the 2010 data. TDI believes that these rebates could absorb the net underwriting profit for the entire individual market and result in carriers pulling out of Texas.
In a wavier filed last year, the TDI requested an adjustment of the MLR standard to 71%, 74%, and 77% for the reporting years 2011, 2012, and 2013, respectively. The Centers for Medicare & Medicaid Services (CMS) denied the request. In addtion to Texas, it also denied a waiver for Guam, Delaware, Florida, Indiana, Kansas, Louisiana, Michigan, Oklahoma, North Dakota. It has granted six waivers: Georgia, Iowa, Kentucky, Maine, New Hampshire, and Nevada. I
According to a post on the TDI website "In denying Texas' application, HHS stated that it took into account each carrier's MLR and profitability…and asserted that few issuers are reasonably likely to exit the individual market in Texas. The department's application clearly showed otherwise.
Major Changes in Life Products And LTC
Long Term Care Insurance Products
Effective 7/30/2012, Genworth redesigned their Privileged Choice Flex product. Changes include suspending sale of the preferred discount, reducing couples discount, suspending sale of lifetime benefit, suspending sale of 10-pay and pay-to-age 65 options, and reducing first year advisor commission by 15 points.
Effective 7/30/2012, United of Omaha redesigned their Assured Solutions Gold product. Changes include suspending sale of lifetime benefits and all limited pay options, suspending sale of multi-life sales, and reducing first year advisor commission by 15 points.
Effective 8/13/2012, John Hancock redesigned their Custom Care III product. Changes include added Benefit Builder feature, also a premium increase of new business, average of 9% increase for CPI, 15% increase on 5% inflation.
Contact Steve Gresso at 713.977.0611 or click his name to email requests for up to date quotes and any questions you may have on these product changes.
