Some may get another Coronavirus stimulus check but as premium rebate

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Some may get another Coronavirus stimulus check but as premium rebate
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Since the start of the coronavirus pandemic, Congress has come up with three rounds of stimulus checks. Discussions are ongoing whether or not there is a need for the fourth round of stimulus checks. Though there is no surety of another round of coronavirus stimulus checks, some people may get an unexpected payment in the form of premium rebates from insurers.

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Not coronavirus stimulus checks, but premium rebates

This payment will be for health insurance customers, and in the form of higher premium rebates. Insurers may give higher rebates because they had less care to cover after the pandemic hit the U.S. last year.

The higher rebates are due to the Obama-era Affordable Care Act, which includes a provision mandating insurers to spend at least 80% of the amount they get from premiums, on things like health care claims. In case they fail to do so, they have to return the amount in the form of rebates.

As per an analysis by the non-profit Kaiser Family Foundation, some people may qualify for rebates of about $300. The foundation noted that hospitals and other care providers canceled surgeries and non-essential care last year following the surge in COVID-19 cases.

“Not all policy holders are due rebates, but among those who are, this year’s rebates work out to roughly $299 per plan member in the individual market, $127 per member in the small group market and $95 per member in the large group market, according to KFF’s analysis,” the non-profit says.

KFF noted that private insurers could pay about $2.1 billion in rebates, the second-highest amount ever under the Affordable Care Act.

Not only due to COVID-19

A point to note is that these rebates are not only due to the coronavirus pandemic. Significant profits that the insurers made in 2018 and 2019 also played a part in higher rebates this year. These rebates are calculated using the past three-year average.

Further, the non-profit says that insurers should start issuing the rebates sometime later this fall, and about 10.7 million Americans will be eligible for the payment. The amount you get may vary as per your geographic region because of different calculation methods. Also, the amount would be less if the insurer has already provided premium breaks to customers in response to the drop in care.

According to Kaiser Vice President Cynthia Cox, about half of customers in the individual market would get these rebates. Also, some with employer-sponsored coverage may also get this rebate.

It must be noted that the payment might come in the form of a check, or you may get it in the form of premium credit. The amount that you would get as a rebate would be finalized later this year, and delivered by the end of September.

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Aman is MBA (Finance) with an experience on both Marketing and Finance side. He has worked as a Risk Analyst for AIR Worldwide, and is currently leading VeRa FinServ, a Financial Research firm. Favorite pastimes include watching science fiction movies, reviewing tech gadgets, playing PC games and cricket. - Email him at amanjain@valuewalk.com
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