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Proposed bill could shrink health insurance rebates

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TWC News: Proposed bill could shrink health insurance rebates
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A bill in Washington would greatly diminish the power of a popular provision of the Affordable Care Act.

The 80-20 rule produced about $1.7 million in rebates for last month for Texans who have health insurance, but now a measure which could make its way out of committee Thursday would change that.

In July, Cindy Edwards knew her health insurance company owed her and her husband more than $761 for spending more than a fifth of their healthcare premium dollars on administrative costs—things like salaries and marketing.

The 80-20 rule -part of the Affordable Care Act- requires insurance companies spend 80 percent of your healthcare premium dollars on actual health care.

"I think we need to stay on top of how they're spending their money because if we're getting this kind of money back like we did this last year—what about the previous years before that—how much did they overcharge us for those years?" Edwards said.

That accountability might be short-lived if a bill in the House Energy and Commerce Committee gets enough votes Thursday to send it to the House floor.

"The argument is that this medical-loss ratio, the 80-20 rule, is having a negative impact on brokers and agents that are out there selling," Blake Hutson with Consumers Union said.

Hudson says there’s no evidence that anyone’s bottom line is suffering as a result.

Still, the lawmakers behind the bill want to eliminate brokers and agents’ fees from the 80-20 equation.

"You're going to lose about two-thirds of the rebates consumers got this summer,” Hutson said. “We're talking about somewhere in the realm of over $700 million out of the $1.1 billion consumers got."

Hutson says it's not clear in the language of this bill if it would be retroactive and would affect rebates people have already received.

Click here to read the full report by Consumers Union.

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