Kokomo Tribune; Kokomo, Indiana

Local News

September 27, 2013

Justifying rate increases and spending

[Editor’s note: With significant portions of the Affordable Care Act to be implemented starting on Jan. 1, 2014, the Kokomo Tribune is running a series of stories exploring how the personal responsibility mandate, the expansion of Medicaid and the new health exchanges will affect consumers.]

Q: It’s my understanding that at one time health insurance companies kept as profit of 5 cents of every premium dollar and now put as much as 50 cents in their pocket as profit.

The Affordable Care Act will limit the amount insurance companies can put into their pockets to between 15 and 20 cents of every premium dollar, depending on the market. Furthermore, the insurance companies must justify any premium increases to regulators, rather than just arbitrarily increasing premiums because they feel like it.

If so, when do these rules take effect and where does the consumer report/question premium increases?

A: The Affordable Care Act addresses insurance premiums and justification of rate increases in an effort to reduce the cost of health care. The two provisions are designed to hold health insurance companies accountable to consumers and ensure American families receive true value for their premium dollars, Kathy Young, CEO of St. Joseph Hospital, said.

Young said these provisions are known as the 80/20 rule, also called the Medical Loss Ratio rule, and Rate Review.

“Under the 80/20 rule, insurance companies are required to report how much they spend on health care and how much they spend on administrative costs, such as salaries and marketing,” she said. “If an insurance company spends less than 80 percent of individual and small group premiums or less than 85 percent of large group (usually 50 employees or more) premiums on medical care and efforts to improve quality care, they must rebate a portion of the premium that exceeded this limit back to consumers.”

Rebates can be paid in four different ways: A rebate check in the mail; lump sum reimbursement to the account used to buy insurance; reduction in future premiums; or, if insurance is through your employer, the employer must use the rebate to benefit employees.

Text Only | Photo Reprints
Local News
  • Farmers Market 01 Kokomo Downtown Farmers' Market gets facelift Pint-sized gardeners made homemade Chia Pets at the Kokomo Downtown Farmers' Market Saturday morning while their parents shopped for homegrown produce nearby. The kids packed grass seeds and dirt inside the disposable socks you get at shoe stores. Th

    April 23, 2014 3 Photos

  • FEMA grants disaster aid to Tipton County The Federal Emergency Management Agency has approved disaster aid for 19 Indiana counties hit by a January storm that brought paralyzing snow and frigid temperatures. Governor Mike Pence received word Tuesday that FEMA had granted his appeal for fede

    April 23, 2014

  • Native American inmate sues Miami Correctional Facility BUNKER HILL - A Native American inmate is suing the Miami Correctional Facility for violating his constitutional religious freedom after the prison last year terminated Native American worship services. Daniel Littlepage says in a class action lawsui

    April 23, 2014

  • INDOT to install curbs on Markland Indiana Department of Transportation maintenance crews have been scheduled to install traffic separator curbs between opposing lanes of State Road 22/Markland Avenue during the week of April 28. Placement of the highly visible manufactured curbing is

    April 23, 2014

  • Take Back the Night 17 Crowd rallies around domestic violence victims Doran Gwyn vividly remembers the night his stepdad came home from work and sat down at the table for supper. "He looked at the meal and said, 'What is this,'" Gwyn recalled. Then he took a bowl of food and smashed it against the ceiling in a rage and

    April 23, 2014 3 Photos

  • Tipton commission appointments get tangled up in confusion Months of confusion over a pair of appointments to two economic development commissions in Tipton County appear to be coming to an end, but not without its share of confusion. Single appointments to both the Tipton County Economic Development Commiss

    April 23, 2014

  • FEMA OKs aid for Tipton, 18 counties, but not Howard Co.

    The Federal Emergency Management Agency has approved disaster aid for 19 Indiana counties hit by a January storm that brought paralyzing snow and frigid readings.

    April 22, 2014

  • Energy-saving program powering down this year Ever wonder how energy efficient your house is? You can find out. For free. But not for long. Energizing Indiana, a 2-year-old initiative of the Indiana Utility Regulatory Commission, offers any homeowner in the state a free energy assessment for the

    April 22, 2014

  • Ways to celebrate Earth Day everyday “Help save the planet.” It’s a common phrase that sounds impossible to most of us. After all, what can one person really do to make an impact on the huge environmental issues facing people all over the world? But going green doesn't have to be a daun

    April 22, 2014

  • Broken blades worry residents

    Two broken turbine blades in the past three months have citizens in Tipton County concerned about the safety of the Wildcat Wind Farm. Monday's Tipton County Board of Commissioners meeting provided a forum for residents to speak out, some in favor of

    April 22, 2014

Latest news
Featured Ads
Only on our website
AP Video
Bon Jovi Helps Open Low-income Housing in Philly Pipeline Opponents Protest on National Mall Hagel Gets Preview of New High-tech Projects S.C. Man Apologizes for Naked Walk in Wal-Mart New Country Music Hall of Fame Inductees Named 'Piles' of Bodies in South Sudan Slaughter New Yorkers Celebrate Cherry Blossom Blooms SCOTUS Hears Tv-over-Internet Case Justice Dept. Broadening Criteria for Clemency Chief Mate: Crew Told to Escape After Passengers 'Miss Meadows' Takes Holmes Back to Her Roots Biden: Russia Must Stop Talking, Start Acting David Moyes Out As Manchester United Manager Raw: Leopard Bites Man in India Iowa College Finds Beauty in Bulldogs High Court to Hear Dispute of TV Over Internet Stowaway Teen Forces Review of Airport Security
Parade
Magazine

Click HERE to read all your Parade favorites including Hollywood Wire, Celebrity interviews and photo galleries, Food recipes and cooking tips, Games and lots more.
Obituaries