Health Plans Must Spend Premiums on Medical Care

By: The Associated Press
By: The Associated Press

WASHINGTON (AP) -- The Obama administration says insurers must spend the premiums they collect on medical care, or give rebates to consumers.

The Health and Human Services department unveiled a new requirement Monday that health insurance companies spend at least 80 cents of every premium dollar on medical care and quality. For employer plans with more than 50 people, it's 85 cents on the dollar.

The rule goes into effect Jan. 1. Starting in 2012, as many as 9 million people could get rebates averaging $164, officials estimate.

Part of the new health care law, the requirement is meant to give consumers better value for their premiums. is happy to provide a forum for commenting and discussion. Please respect and abide by the house rules:

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