Wisconsin Consumers Receive Health Rebates Under ACA

The checks are in the mail.

Refunds are going to more than 50,000 consumers who bought health insurance last year through Common Ground Healthcare Cooperative, which serves 20 counties in eastern Wisconsin.

The health care co-op will pay out $18.5 million in premium rebates because anticipated medical and pharmacy claims were lower than projected. The average rebate for each member will be $370.

Under the Affordable Care Act, insurers selling to individuals and small businesses are required to spend at least 80 percent of premiums on medical care under what’s known as the medical loss ratio. The remaining 20 percent is for marketing, administrative costs and profit. Companies with large group plans have to spend more of premium dollars on health care.

“We fully support this provision of the ACA because it ensures our members’ premiums are being spent on what they should be — their medical expenses,” said Cathy Mahaffey, CEO of the health co-op.

In July, the Fifth Circuit Court of Appeals heard oral arguments in a legal challenge against the ACA. A decision is pending whether to uphold or reject a lower court ruling in which a Texas judge declared the ACA unconstitutional because Congress eliminated the penalty for not having insurance.

It’s just one obstacle the ACA has faced since being implemented.

Insurers left the marketplace in 2017 after financial losses the previous year. Since then Wisconsin insurance officials say the market has improved, in part because the state subsidizes high-cost medical claims through a reinsurance program started under former Republican Gov. Scott Walker and continued by Democratic Gov. Tony Evers.

“We continue to see increased stabilization in the individual health insurance market going into the 2020 plan year,” said Nathan Houdeck, deputy insurance commissioner for state of Wisconsin.

“On average we’re seeing rates go down for the second straight year and several insurers are expanding their service areas,” he said.

Next month, state officials will release which insurers are offering health plans on Wisconsin’s federal exchange in 2020. People can begin signing up for plans Nov. 1 offered under the ACA.

Enrollment on Healthcare.gov has been falling in recent years — both in the state and across the United States.

The 2019 enrollment on Wisconsin’s federal marketplace was down about 9 percent from 2018. This follows a 7 percent drop from 2017 to 2018.

Common Ground Healthcare Cooperative is one of the few remaining health co-ops in the nation. They were started under the ACA to compete with private insurers. Originally there were 23 co-ops but only four continue to operate in five states.