SCOTUS Ruling Could Mean Rebates For Affected ACA Enrollees
April 28, 2020

There are a whole lot of ifs, ands, and buts involved, but there is at least a possibility that some ACA enrollees will eventually see a rebate as a result of the recent Supreme Court ruling on ACA risk corridors. ACA blogger Charles Gaba explains:

... As I explained last November, it's possible that a big chunk of that $12 billion windfall will end up being rebated to several million ACA exchange enrollees in the end anyway thanks to the ACA's Medical Loss Ratio provision. There's a lot of variables and caveats involved, including not knowing how the revenue will be recorded (will it be on a "cash basis", in which case it'll be a one-time revenue spike for 2021? Or will it be recorded via accrual accounting, in which case the carriers would have to go back and adjust their financial records from 2015, 2016 & 2017?

If it's the former, then millions of people enrolled in an ACA exchange plan in 2021 could see massive MLR rebate checks showing up in 2022, 2023 and 2024. After all, as I noted a week or so ago, the 2021 MLR payments are already expected to be huge to begin with, and I assume they'll be pretty robust in 2022 as well.

If it's the latter, then it'll get extremely messy and convoluted. Someone who was enrolled in, say, a Blue Cross Blue Shield policy back in 2015 might receive a small MLR rebate payment in 2022 even if they dropped their BCBS policy and moved to other coverage in 2016. It could get very weird.

Even then, it's not gonna be the entire $12 billion which gets rebated to enrollees either way. Not every carrier was owed money in the first place, and even those which were won't necessarily have to pay all/any of it back. Remember, the MLR rule says that a carrier has to pay back revenue if it pulls it below the 80% MLR threshold--that is, they have to spend at least 80% of their revenue on actual medical claims and pay back the difference.

Gaba concludes:

Still, even 1/10th of the $12 billion would amount to $1.2 billion being rebated to policyholders, which is still a big chunk of change. It's a nice thing to keep an eye out for, anyway.

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