New Health Care Law May Soon Be Putting Money In Your Pocket
NEW YORK (CBSNewYork) – Your health insurance company could owe you money, a share of nearly $1.5 billion.
It's a little known provision of the new national health care law: insurance companies that don't spend patients' money wisely have to pay a penalty. They'll have to refund $1.4 billion to 9 million consumers this summer, including many in the Tri-State Area.
However, industry lobbyists are trying to put the kibosh on that, reports CBS 2's Marcia Kramer.
"It would be a huge blow to consumers if we lose those protections," said Sondra Roberto of the Consumers Union.
Consumer advocates said the bill was intended to force insurance companies to charge lower rates by cutting the amount of money they can spend on salaries, bonuses, fancy offices and the like.
"This rule is just starting to work for consumers and we really need to allow it to continue to work. We've seen rate increases go up for the last several years and this is finally a tool that will start to curb those increases," Roberto said.
The bill says insurance companies have to spend 80 to 85 percent of every health care dollar on health care. If they don't, consumers get either a refund or a rate reduction.
"The insurance companies hear this and they hate it so they've hired a lot of lobbyists, but I have told them over my dead body. I am going to do everything I can to keep this part of the law. It's one of the few breaks consumers get," Sen. Chuck Schumer said.
Schumer isn't the only New Yorker vowing to take on the powerful insurance lobby. Congressman Eliot Engel is the lone New Yorker on the House Health Committee.
"If we're going to try to keep health care costs affordable then I want to make sure that when people are spending their hard-earned dollars on health care that that money goes to actually providing health care," said Engel, a Democrat from the Bronx.
The refunds are due Aug. 1. How much you get depends on the rate you pay. But consumer advocates say don't underestimate the insurance lobby. Write to your legislators and tell them not to change the law.
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