57,700 in state to share rebates from insurers

Sen. Stephanie Flowers, D-Pine Bluff, asks a question  during a joint meeting of the House and Senate Public Health, Welfare and Labor Committees in Little Rock, Ark., Thursday, July 24, 2014. (AP Photo)
Sen. Stephanie Flowers, D-Pine Bluff, asks a question during a joint meeting of the House and Senate Public Health, Welfare and Labor Committees in Little Rock, Ark., Thursday, July 24, 2014. (AP Photo)

More than 57,700 Arkansans will share in $6.3 million in rebates from insurance companies as a result of a provision in the 2010 federal health care overhaul law, a federal agency announced Thursday.

The total rebate amount was an increase from last year, when insurance companies paid almost $3.5 million in rebates under the so-called 80/20 rule that requires insurers to spend 80 percent of premiums on medical care, not overhead or profits.

The rebates announced by the U.S. Department of Health and Human Services were for premiums collected last year, before subsidized coverage under the state's private-option program and insurance exchange began.

The private option allows Arkansans who qualify for coverage under the state's expanded Medicaid program to sign up for insurance plans on the state's exchange and have the premiums paid by Medicaid.

Separately, state Sen. Stephanie Flowers, D-Pine Bluff, complained at a meeting of the Legislature's public health committees that Centene Corp. plans that include dental and vision benefits require a six-month wait before the company will cover "restorative" dental benefits, such as filling cavities.

Next year, plans offering dental and vision benefits will not be allowed under the private option.

That means people signing up for the Centene plans now won't get the restorative dental coverage because the plans will end on Dec. 31, before the six-month wait is over.

"It just strikes me as just mind-blowing that we would just be spending hundreds and thousands of dollars on premiums that are of no avail to that policyholder," Flowers said.

The Medicaid expansion, authorized under the federal Patient Protection and Affordable Care Act, extended eligibility to adults with up to 138 percent of the federal poverty level: $16,105 for an individual, for instance, or $32,913 for a family of four.

Of the four insurance companies offering plans on the exchange, St. Louis-based Centene is the only one that included adult vision and dental benefits in some of its comprehensive medical plans available to private option enrollees.

Adult dental and vision benefits are not required under the federal health care law and won't be included in the plans available to private option enrollees next year, state officials have said.

Arkansas Surgeon General Joe Thompson has described the inclusion of the extra benefits as a "one-year glitch" that resulted from the tight timeline for implementing the private option, including gaining federal approval and crafting requirements for insurance companies, after the program was approved by the Legislature last year.

Earlier this month, the state Department of Human Services began including a notice on its enrollment website, insureark.org, notifying private option enrollees that because of the waiting period, they will not receive coverage for restorative benefits under the Centene plans if they sign up after July 1.

A brochure for the plans, marketed under the name Ambetter Arkansas, available on the company's website doesn't mention the six-month waiting period.

Flowers said state officials should do more to get the word out, noting that some people may visit the website if they sign up for the coverage with the help of an insurance agent.

"We need to save those tax dollars," Flowers said.

From the Oct. 1 start of enrollment through July 18, 19,581 private option enrollees have signed up for a Centene plan that includes dental and vision benefits, including 6,762 people who enrolled after April 30, interim Medicaid Director Dawn Zekis said.

Deputy Insurance Commissioner Cynthia Crone said the amount of premium associated with the dental coverage varies according to age and coverage region.

For a 21 year-old, the coverage adds an average of $15 in premium costs. For a 42-year-old, it adds an average of $25, she said.

The Medicaid program pays the full premium, but enrollees must pay half of the cost of the restorative dental benefits after the six-month waiting period.

The plans also cover up to two routine exams and cleanings per year and other preventative dental services, such as a limited number of X-rays, at no charge with no waiting period.

John Ryan, chief executive of Centene subsidiary Arkansas Health and Wellness Solutions, said his company is working with state officials to ensure that enrollees are aware of the waiting period.

"The plans that are on the marketplace and exchange right now are of great value to both the taxpayer and the citizens that are able to enroll in them," Ryan said.

The federal government is expected to pay the full cost of the private option through 2017, as long as the cost stays below a specified cap.

Though June 30, the state had paid an average of $491.17 per enrollee per month. The per enrollee cap for 2014 was set at $477.63 a month.

Human Services Department officials have said the higher costs resulted from a higher-than-expected age of enrollees, which led to higher premiums. They have said the state will likely request an adjustment to the cap as allowed under the terms of the waiver authorizing the private option.

Human Services Director John Selig said the state's costs could be reduced by a provision of the Affordable Care Act requiring insurance companies to spend at least 80 percent of the premiums collected on medical care.

In the case of the private option, any rebates for private option enrollees would go to the federal government.

The pre-private option rebates announced Thursday by the federal Health and Human Services Department included more than $1.7 million for 13,506 Arkansans covered by plans that consumers bought on their own without help from an employer; more than $1.9 million for 21,207 people receiving coverage through employers with 50 employees or less; and almost $2.6 million for 22,999 people covered by plans offered from employers with more than 50 employees.

Minnetonka, Minn.,-based United Healthcare owed the largest amount in the state -- $1.3 million to people covered by individual market plans and $4.3 million for people covered by employer-sponsored plans.

Other insurers owing rebates included North Richland Hills, Texas-based MEGA Life and Health Insurance Co., which will pay $193,822 to consumers covered by individual market plans; Lake Forest, Ill.-based Trustmark Life Insurance Co., which will pay $220,713 to people in employer plans; Louisville, Ky.-based Humana, which will pay $178,698 to people in individual market plans; Columbia, S.C.-based Companion Life Insurance Co., which will pay $15,675 to people in individual market plans; and Bloomfield, Conn.-based Cigna, which will pay $5,530 to people in employer plans.

The requirement to spend at least 80 percent of rebates on medical expenses applies to plans sold to individuals and small businesses, defined in Arkansas as firms that have 50 or fewer employees.

Refunds going to employers must be passed along to employees or spent in a way that benefits employees.

Plans covering larger employers are required to spend at least 85 percent of premiums on medical care. The requirements don't apply to "self-insured" businesses that fund their own insurance plans.

Nationwide, insurance companies will pay more than $332 million in rebates to 6.8 million consumers, with an average rebate of $80 per family, according to the Health and Human Services Department's Centers for Medicare and Medicaid Services.

That was down from last year, when companies paid $504 million in rebates.

Companies must pay the rebates by Aug. 1.

"We are pleased that the Affordable Care Act continues to provide Americans better value for their premium dollars," Health and Human Services Secretary Sylvia Burwell said in a news release. "We are continuing our work on building a sustainable long-term system, and provisions such as the 80/20 rule are providing Americans with immediate savings and helping to bring transparency and accountability to the insurance market over the long term."

A Section on 07/25/2014

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