#CostsOfRepeal: Congressman Paulsen Would Take Away Consumer Rebates from 9,200 Minnesota Families

Because insurance companies haven’t been spending enough on health care, 8.5 million consumers got average rebates of $100 last year – but Congressman Erik Paulsen would eliminate those rebates by repealing the Affordable Care Act. In fact, Congressman Paulsen’s plan would mean that 9,200 consumers in Minnesota couldn’t get those rebates in the future because insurance companies would once again be able to spend whatever they want on big executive bonuses.

In 2012, nearly 80 million consumers saved $3.4 billion upfront on their premiums, and new ACA rules require insurance companies to spend 80 percent of premiums on actual patient care or give rebates to consumers. 9,200 consumers in Minnesota received an average rebate of $303 last year, but if Congressman Paulsen has his way and the ACA is repealed, those consumers won’t receive any rebates or savings next year.

“Congressman Paulsen’s reckless plan to repeal the entire Affordable Care Act would mean 9,200 consumers in Minnesota would be left without health insurance rebates, after receiving an average rebate of $303 last year,” said Emily Bittner of the Democratic Congressional Campaign Committee. “Instead, Congressman Paulsen would send us back to the days when insurance companies could spend premiums however they want, whether it’s red tape or big executive bonuses. The people of Minnesota are saving money because the ACA is reining in insurance companies, and they cannot afford for Congressman Paulsen to send us back to an old, broken system.”

BACKGROUND:

CMS: Millions of Consumers Saved on Premiums Upfront or Received Insurance Rebates Due to Affordable Care Act. “In 2012, the 77.8 million consumers in the three markets covered by this 80/20 rule saved 3.4 billion upfront on their premiums because of the 80/20 rule and other Affordable Care Act programs. Additionally, consumers will save $500 million in rebates, with 8.5 million enrollees due to receive an average rebate of approximately $100 per family.” [CMS.gov, 6/20/13]

Affordable Care Act Requires Insurance Companies to Spend 80 Percent of Premium Revenue on Patient Care. “There’s a little known part of the health care reform law that requires insurance companies to spend 80 percent of their premiums on health care or reimburse the customer […] No more than 20 percent of premiums can be spent on salaries, bonuses, and advertising.” [CBS News, 7/31/12]