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.


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  • by adam on Nov 22, 2010 at 11:05 AM
    well, my company just went to a high deductable HSA plan which will increase my rate from 250 a month to 584. yeah, fun times ahead for all of us!!!!!!!!
  • by Kelly Location: Lansing on Nov 22, 2010 at 10:12 AM
    This requirement is designed to put insurance carriers out of business, taking away any and all alternatives to their government-run pool. With every single citizen in the pool, what kind of service and costs can we expect? Fun times ahead for all of us!
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