Blue Cross & Blue Shield of Florida led the way among the nation’s top insurers that were required to pay the largest refund to policyholders and new enrollees under health reform, with $10.1 million in refunds as of the end of June.
That’s according to data compiled by CMS and analyzed by SNL Financial on the Affordable Care Act’s medical loss ratio, which stipulates that insurers must use 80 percent of premium dollars on actual care for small-group plans and 25 percent on large-group plans. If the insurer fails to achieve this ratio, it must refund a portion to the policyholders.
All the refunds were returned to small-group plans. Blue Cross & Blue Shield of Florida recorded a medical loss ratio of 78.6 percent on small-group business in 2013, according to SNL data. This was down slightly from 79.3 percent in 2012, but up from 76.2 percent in 2011.
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The $10.1 million in refunds for Blue Cross & Blue Shield of Florida is actually lower than what the insurer was anticipating — an estimated at $11.9 million, according to its 2013 filing.
Since the CMS figures are at the individual company level, the $10.1 million does not include the rebates owed by Health Options Inc., another insurer within the Blue Cross & Blue Shield of Florida family. Health Options owed $3.4 million from small-group plans and $5.7 million from large-group plans, CMS reported, for a total of $9.1 million.
Florida and Maryland were the two highest refunds states; Vermont was the lowest. But in relation to the amount of health premiums earned reported by insurers within the state, these were not the largest. Excluding California, the largest ratio of refunds to health premiums earned could be found in Montana, according to SNL and CMS data.
California is not included in the analysis because most insurers in the state do not report to the National Association of Insurance Commissioners.
Nationwide, insurers owe refunds of $333.2 million, with roughly 75 percent coming from the combined individual and small-group market, according to CMS data.
