Highmark Blue Cross Blue Shield Delaware will send $21.5 million in rebates this month to customers of its 2019 plan.
Those receiving the rebates will include people who have policies through Delaware’s Affordable Care Act marketplace, individuals who buy policies directly from Highmark and small businesses who have 50 employees or less.
This is the first time individual policy holders — both ACA and direct purchasers — will receive a rebate, according to the Delaware Department of Insurance.
It was celebrating word of the rebates Thursday, especially against the backdrop of businesses and families coping with the COVID-19 pandemic.
“The COVID-19 crisis has put the cost of care at the forefront of our minds. Small businesses are struggling,” said State Insurance Commissioner Trini Navarro in a provided statement. “But these rebates can help them to continue providing vital benefits to employees in the year ahead.
“For individual policyholders and small groups alike – there is good news about health insurance affordability this week.”
The rebates are a result of a Medical Loss Ratio audit performed every year, according to Christina Haas of the Delaware Department of Insurance.
Under the Affordable Care Act guidelines, insurance companies are expected to spend 80 percent of premium costs on medical care. If a company doesn’t, the money must be returned to policyholders. If it spends more than that, the company may raise its premiums for the next cycle.
The rebates raise questions about what will happen with 2020 policies. COVID-19 has created extremes in usage of them, with sick people sometimes requiring long hospital stays, but the majority of people not using medical benefits because of the government shutdown of businesses and requests for people to stay home.
The 2020 policies will not be evaluated until after the year ends, so the answers may not be known until this time next year.
Highmark will be mailing checks Sept. 21.
A lot of policyholders remain in the plans from year to year, so for many this rebate will be in addition to the 1% decrease in policy costs announced earlier this week for next year’s individual ACA participants and the 3 percent decrease for small groups.
The Medical Loss Ratio audit showed that Highmark only used 73.9 percent of individual policy premiums. Rebates in that category will total $12,645,590.
Highmark will mail out 19,273 rebate checks to individuals ranging from $5 to 3,025. The average rebate will be $656.
For small groups, the audit showed a usage rate of 74.2%, with total rebates of $8,887,552. Highmark will mail 2,779 checks ranging from $26 to $46,921to customers.
One group will receive the rebate over $40,000, but the state did not know which group. In total, 178 companies will get back more than $10,000, and 93% will receive less than $10,000 with the average being $3,198.