Customers are used to receiving health care bills, but some lucky policyholders will actually be getting money back from one health insurer.
Blue Shield of California, which in the past has come under fire for seeking steep rate hikes, announced Tuesday that it is returning $50 million to customers.
Company officials announced last year that Blue Shield would start giving credits to policyholders if its profits exceeded 2 percent of revenue. Perhaps not coincidentally, the announcement came just months after the company faced criticism for seeking cumulative rate hikes of as much as 59 percent for customers. In the end, the company didn't raise rates.
The San Francisco-based company has given $470 million to policyholders so far. Company officials say that with this latest round, the average individual policyholder will receive about $25 in credits, and the average family of four will get $75 in credits.
Blue Shield of California may be one of the only companies giving money back voluntarily, but Obamacare requires all health insurance companies to take similar measures. The Affordable Care Act mandates that if health insurers do not spend at least 80 percent of their customers’ premiums on health services, then they must give away the remainder to policyholders in the form of rebate checks. The first rebate checks came in the mail this past summer.
Even with the rebates, customers will still likely face steep health care costs. Health care costs have been on the rise. Health insurance premiums for employer-sponsored plans have risen three times as quickly as wages since 2002, according to the Kaiser Family Foundation.
(Hat tip: the Los Angeles Times.)