Missouri Insurers Must Issue $90 Million in Refunds
The largest insurers in Missouri are required to reimburse policyholders around $90 million.
Ambetter, a subsidiary of Centene Corporation, based in Clayton, is expected to send out checks totaling $87.5 million to Missouri customers. These rebates will be in line with the medical loss ratio guidelines set by the Affordable Care Act. Policyholders will receive notifications about these refunds in letters dated September 10, and many might have already seen checks arrive in their mailboxes over the past weekend.
United Healthcare, a competitor of Ambetter, is also distributing rebates to its Missouri clients. According to a news release from September 5, United Healthcare announced it would provide $122.2 million in rebates on group plans across 31 states, alongside $167.1 million for individual plans in 19 states.
Missourians with United Healthcare will also qualify for some form of a rebate, although the specifics were not disclosed.
The current rebates from Ambetter represent the largest amount issued to individual insurers in Missouri since the Affordable Care Act was implemented back in 2012. Over the last 12 years, insurers have reimbursed a total of $587.1 million to Missourians, with $192.7 million refunded in 2019.
“This is a standard and necessary process under the Affordable Care Act. It mandates health plans to return a portion of the premiums to members when healthcare spending is below the federal threshold,” stated Centene in a prepared statement.
Insurance companies are obliged to report how much premium revenue goes towards healthcare versus administrative costs. The Centers for Medicare and Medicaid Services (CMS) review these reports to decide on the rebate amounts. Rebates will be calculated based on a rolling three-year interval, including Ambetter’s data from 2022 to 2024.
In 2023, CMS issued $957 million in rebates nationwide. Details regarding rebates for 2024 have yet to be released.
Insurance providers must allocate at least 80% of total premiums and 85% of premium income towards healthcare services.
A notable aspect is that Ambetter indicated it spent only 71.4% of the approximately $1 billion received in premiums for individual plans in 2024. As a result, the insurer is obligated to refund an 8.6% difference.
Ambetter holds the title of Missouri’s largest private insurance provider, according to KFF data. It covers roughly 46% of the 270,275 individuals who have purchased individual plans, while the second-largest provider accounts for about 28%, and United Healthcare covers around 7%.
In addition to sending out rebate checks, Ambetter customers can expect one of the smallest premium increases next year. According to a news release from the Missouri Department of Commerce, the average premium rise for Ambetter will be just 1.9% starting January 1.
Conversely, the other seven insurers in the Missouri market anticipate average increases ranging from 4.6% to as much as 29.2%. Interestingly, Kansas City’s Blue Cross and Blue Shield has even announced a 4.2% reduction in premiums.
“Missouri residents should prepare for premium increases in several individual market plans, along with changes in coverage areas and networks,” the department advised in its release.
Final rates for all insurance companies will be revealed by October 31.
