Health Insurers on Tab for $1.3 Billion in Rebates, Study Says

A study by the Kaiser Family Foundation of health insurers' obligations under the Patient Protection and Affordable Care Act (PPACA) estimates that the nation's insurers owe some $1.3 billion in rebates for not spending at least 80 percent of their collected premiums on health care services.

According to Kaiser estimates, the rebates break down like this: $426 million, or about $127 per person, to individual consumers, representing 31 percent of all privately purchased health plans; $541 million to large employers, representing about 20 percent of that category; and $377 million to the small group market, for about a 25 percent share. 

The Kaiser study, however, warns that the rebates, due Aug. 1, will go predominantly to employers, who in turn can use the money to lower future premiums rather than passing it on to employees. The study also warns that, should the Supreme Court invalidate PPACA in June, the rebates would no longer be mandated.