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Lansing, Michigan

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Health Insurers Required to Pay $89 Million in Rebates to Michigan Consumers

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Michigan consumers can expect to see about $89 million in rebates from their healthcare providers over the next three years after federal health regulators ruled that the state cannot be exempted from new health reform requirements. The ruling requires insurers to spend 80 cents for every premium dollar spent on individual policies.

Consequently, if insurers did not spend enough this year then they will be required to issue a rebate or future credit to consumers. Several health groups are pleased to see that Michigan will not be allowed to be exempted from the health reform requirement as it will ensure that consumers keep more of their money. Michigan was one of thirteen states seeking an exemption. Seven states were also rejected and six received exemption or will see some modification to the requirements. Insurance commissioner, Kevin Clinton, and Governor Rick Snyder sought the exemption for Michigan and argue that the requirement will force some insurers to stop selling insurance, leading to higher costs and fewer choices for consumers.

Nevertheless, Gary Cohen, a federal consumer oversight director in the U.S. Department of Health and Human Services says that the new provisions will allow consumers greater insight into health insurance rate increases and spending and that holding down insurance costs is extremely important to consumers struggling to pay for health care. Before the health reform requirements, only two health insurance companies in Michigan met the "80-20" rule, Blue Cross Blue Shield and BCS Life Insurance Company. Other companies that failed to meet the requirements included United Healthcare, Aetna, Humana, and American Enterprise.