Blue Cross won’t issue rebates to customers

Crain’s reports:

“Blue Cross & Blue Shield of Illinois won’t be handing out rebates to its customers because it has met new medical spending rules, a spokesman for the state’s largest health insurer said.

On Thursday, the Obama administration announced that about 163,000 families in Illinois will receive health insurance rebates that average $380 as a result of the federal overhaul of health care.

The rebates result from the health care law’s requirement that insurers spend a set percentage of their premiums on patient care and health activities or refund the difference to customers.

Nationwide, rebates totaling $1.1 billion will be distributed at an average of $151 per family, according to a report by the U.S. Department of Health and Human Services.

But Blue Cross won’t be one of the health insurers giving back money.

“I can’t speak for the competition, but final results for 2011 indicate (Blue Cross & Blue Shield of Illinois) exceeded the new federal requirements as a result of careful expense management, collaboration with providers and other health care professionals, and business innovations,” a spokesman wrote in an email.

Earlier this year, the company opened the door to rebates by sending notices to thousands of individual customers amending their policy terms to allow for refunds.

As of the end of its first quarter, Blue Cross’ parent company, Health Care Service Corp., had set aside $90.5 million in rebates to individual and small group members. The Chicago-based mutual company also operates Blue Cross plans in Oklahoma, Texas and New Mexico, as well as in Illinois.

The law was intended to require insurers to spend a minimum amount of premium revenue on patient care and other health activities — 85 percent for large group plans and 80 percent for small group plans and individual insurance.

Across all its plans in Illinois, Blue Cross exceeded the requirement by spending 88.1 percent, the spokesman said.

Health Care Service booked more than $1 billion in net income in 2011, the second-straight year the mutual company reached that benchmark.

A complete breakdown of rebates by insurer by state is expected to be released by the Obama administration by Aug. 1.”