Rebates shrink as Anthem gets better at pricing

Hoosier health insurance customers are receiving nearly half as much this year in health insurance rebates as they did a year ago, according to data released by the U.S. Department of Health & Human Services.

All of the reduction is attributable to Indianapolis-based Anthem Blue Cross and Blue Shield, which came much closer to hitting the threshold established by Obamacare that 80 percent of premiums be spent on medical care.

All told, Hoosiers are receiving $11.9 million in rebates this year from insurers that used less than 80 percent of their 2013 premiums for medical bills last year. That’s down from $22.6 million handed out last year, based on premiums and medical claims from 2012.

For Hoosiers getting rebates, the average amount is $46.79 per person, according to the federal data. Nationally, the average rebate was $48.73 per person.

Both amounts were down from a year ago, when Hoosiers received an average of $82.74 per person. Rebates nationally last year averaged $59.19 per person.

Anthem is paying out $6.2 million this year, all of it going to 2013 members of its small-employer plans. A year ago, it paid out $17.2 million in rebates, all of it to 2012 members of its small-employer plans.

In 2013, Anthem spent 79.2 percent of the premiums paid by its small-employer customers on medical claims, according to Anthem spokesman Tony Felts. The previous year, it paid out 77.8 percent of small-employer premiums on medical claims.

“We've come very close to meeting that [80 percent goal] in the past year,” Felts said, noting that Anthem has to set its premium rates a year or more in advance, which requires estimating how much consumers will spend on medical care.

“We estimated a lot better, I guess you could say,” Felts said.

Anthem paid out no rebates to its customers that bought individual insurance policies or to its large-employer customers (which qualify for rebates if less than 85 percent of their premiums are spent on medical bills). The same was true the previous year.

After Anthem, the next-largest rebates came from Minnesota-based UnitedHealthcare, which is paying out $2.6 million to its small-employer clients. UnitedHealthcare owed no rebates to its individual or large-employer customers.

Louisville-based Humana owed $950,000 in rebates to its small-employer customers, but no rebates to individual and large-employer customers.