Health Care Plan Rebates Have Hidden Costs

“Some consumers and businesses might see a little extra cash this summer as a result of the 2010 health care law. The Kaiser Family Foundation recently reported an estimated $1.3 billion in rebates will be delivered from health insurers who spent more than the law allotted on administrative expenses and profits. What people don’t realize is that there’s a catch to this ‘free’ money. The rebates are required by an obscure regulation in the health care law, called the ‘minimum loss ratio,’ which also contains longer-term incentives for health insurers to increase costs that will be passed along to all of us. Instead of rushing to spend these extra dollars, rebate recipients are better off pocketing it to pay for higher premiums in the future.”