Dive Brief:
- Health insurers are expected to issue at least $1.3 billion worth of rebates to customers in the coming weeks, hitting a new record, according to an analysis from the Kaiser Family Foundation.
- The record amount reflect just how profitable payers were over the past few years, largely fueled by insurers in the individual market, according to KFF. Companies in the individual market are expected to return about $743 million to customers, more than that of insurers in the small and large markets combined.
- The average rebate per customer in the individual market is about $270. There are about 2.7 million customers in the individual market.
Dive Insight:
The Affordable Care Act sets limits on insurer profits, and in an effort to protect consumers, the law requires plans spend a majority of premium dollars on actual care, or claims for their patients.
Each year, if insurers do not meet that threshold, also known as the medical loss ratio, they issue rebates to customers. The rebates in 2019 take into account performance for the trailing three years.
"Insurers in 2018 were highly profitable and arguably overpriced, which is why rebates are so large despite being averaged across less favorable years (2016 and 2017)," KFF said.

Insurers in the individual market are fueling this whopping rebate return, according to KFF.
Even though exchange insurers struggled in 2016, previous data show that profit margins spiked in the first quarter of 2018. Many attribute the spike to insurers drastically raising premiums amid the uncertainty around policy plans from the Trump administration. Experts have said insurers raised prices and overcorrected in preparing for the potentially turbulent year.
Lingering overhead at the time was the threat of ACA repeal and the loss of cost sharing subsidy payments.
St. Louis-based Centene is expected to dish out the most in rebates, totaling nearly $217 million, followed by Virginia-based Optima Health, owned by Sentara Healthcare, which is set to return nearly $99 million.
