A leading health insurer in the United States, Centene Corporation, has been directed to pay almost $3.3 million in rebate owing to excessive premiums it collected in 2016 compared to the amount spent on medical care as part of Arkansas private-option Medicaid program. The St. Louis-based corporation’s health plans covered about 68,000 customers, including the ones who had enrolled outside the Medicaid program as well as private-option enrollees. While the report by the Centers for Medicare and Medicaid Services does not state how much of the corporation’s rebate amount was for private-option plans, as per the company representatives, almost all of the customers in the state’s individual insurance market are private-option enrollees.
A mandate under the Affordable Care Act (ACA), a corporation is required to issue rebates if the company collects too many premiums compared to what it spends on medical care and activities that improve health care standards, that is, when the spending on medical care and quality improvement fall below the required percentage. As a result of a requirement in the 2010 Patient Protection and ACA, Centene was the only one of the three insurers that offered coverage to private-option enrollees. No other company owed rebates with respect to its offerings to individual consumers. According to the report, Reliance Standard Life Insurance Co. owed $147,236, but that was in connection with offering large-employer plans covering 761 Arkansas residents.
A program created by the federal government and administered by the state, Medicaid provides health coverage to millions of Americans by covering for medical services for low-income citizens. Started as a plan to cover only the poor, Medicaid now touches many more lives who live above the poverty line.
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Insurance plans covering small businesses and individuals are required to spend at least 80 percent of the premiums on various medical care costs and quality improvement. Larger employer plans are required to utilize minimum 85 percent of the premium value for the same purpose.
In 2015, Centene Corp. rebated almost $6.8 million in premiums that it collected in the previous year. In 2016, the corporation was directed to issue $784,875 of rebate in premiums that it collected in the state in 2015. According to the state Department of Human Services Spokesman Amy Webb, the rebates of private-option premiums would go to the federal government.
The recent decision comes after Centene issued a statement, announcing that as of Jan. 7, 2018, more than 1.4 million people had paid for its insurance plans via the federal Obamacare marketplace.
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