Obama Administration Now Basically Just Requiring Health Insurers to Send Out Campaign Mailers

If you’re getting a rebate check from your health insurer, the Obama administration wants to make sure you know where it really came from. Lest no one be confused about the political purpose of the mandatory rebates...

Health-insurance companies must tell customers who get a premium rebate this summer that the check is the result of the Obama administration's health-care law, according to federal guidelines released Friday.

...Rules finalized by the Department of Health and Human Services on Friday instruct insurers to notify recipients of rebates in the first paragraph of the mailing by writing: "This letter is to inform you that you will receive a rebate of a portion of your health insurance premiums. This rebate is required by the Affordable Care Act—the health reform law."

So just a few months before the presidential vote, health insurers will be required to send out billions of dollars worth of checks that credit the Obama administration. Hint, hint, nudge, nudge, remember us come November! I guess the White House didn’t think they could just force health insurers to run ads for Obama’s reelection campaign? 

According to The Wall Street Journal's report, one variant proposal had called for insurers to send out detailed information breaking down exactly how premium dollars were spent, which would have come with compliance costs, but at least would have provided consumers with actual information. But instead the Obama administration seems to have settled on requiring insurers to send out campaign flyers attached to checks.

Here’s what the notices won’t tell you: Despite the rebates, the existence of the health care overhaul isn’t necessarily ensuring that health insurance customers get a better deal.

The rebates will be issued as a result of the law’s medical loss ratio provision, which requires insurers to spend either 80 or 85 percent of the premium revenue they collect on clinical services. Insurers must pay for administrative expenses, overhead, marketing, and profits out of the remaining 15 or 20 percent.  Ultimately what that means is insurer profits are capped as a percentage of premium revenue. So if insurers want to increase their profits, they will have to increase the premiums they charge.

Over time, this will put tremendous pressure on insurers to increase premiums rather than to restrain their growth. As a result, it’s entirely possible that in the absence of the health care overhaul insurance premiums would have been lower than they’ll end up being under the law even if you factor in the rebates. But at least the Obama administration will get credit every time someone gets a check. 

Update: I should note that amongst those enrolled in plans that will receive rebates, not everyone will get rebates directly. As The Journal reported in April:

People with individual insurance may get rebates in the form of checks or discounts against future premiums. Rebates for group plans are expected to go to the employers, and a share is supposed to be passed through to employees.

Editor's Note: We invite comments and request that they be civil and on-topic. We do not moderate or assume any responsibility for comments, which are owned by the readers who post them. Comments do not represent the views of Reason.com or Reason Foundation. We reserve the right to delete any comment for any reason at any time. Report abuses.

  • R C Dean||

    Don't I recall the administration putting pressure on an insurance company not to send out a mailer shortly after ObamaCare passes explaining that premium increases were due to ObamaCare?

  • Skid Marx||

    This man is evil. The founding fathers would have this guy jailed.

  • Hugh Akston||

    For escaping from the plantation?

  • Skid Marx||

    That's right. The founding fathers had no contact with free blacks. Not even when they were in Europe.

  • Brett L||

    Since my premiums went up again, fuck these guys. I will wipe my ass with that check and send it to the White House. I'll even consider endorsing it to the campaign committee to see if it'll get cashed, but only because that would ensure someone had to handle it.

  • Peter Suderman||

    If you get your insurance through your employer, you likely won't get a check directly; the rebate money will go directly to your employer. According to the WSJ:

    People with individual insurance may get rebates in the form of checks or discounts against future premiums. Rebates for group plans are expected to go to the employers, and a share is supposed to be passed through to employees.
  • Brett L||

    Self-Employed. I buy my own. It is probably cheaper than anything a multiemployee shop could find. But it continues to increase as I continue to spend less on health care than than they take in on premiums. And since its a deductible, not copay policy, my insurer is out $0 on me in the 5 years I've owned it.

  • SIV||

    Just wait till you OB/GYN coverage goes up.

  • fried wylie||

    are employers mandated to pass-along the campaign literature as well?

    pretty gaping loophole in their strategy otherwise.

  • Ken Shultz||

    So just a few months before the presidential vote, health insurers will be required to send out billions of dollars worth of checks that credit the Obama administration.

    He's a Hugo Chavez wannabe.

    Our last two presidents have been two of the worst presidents we've had since World War II. I'd hate to think that people coming of age over the last 12 years think this is normal.

    Only Johnson and Nixon give Bush and Obama a run for their money.

  • R C Dean||

    I'm not seeing how the required notice isn't a violation of the First Amendment.

  • Brandon||

    COMMERCE CLAUSE!!!!!!

  • plu1959||

    INSURANCE COMPANIES ARE NOT PEEPUL!!

  • SugarFree||

    Well, at least there aren't giant posters of him all over the place.

  • John||

    How stupid and cocooned from reality do you have to be to be an editor of a "news magazine" that at least publicly claims to be impartial, and thing running that cover is a good idea?

  • plu1959||

    They're in survival mode. Anything that will attract eyeballs is fair game, professionalism be damned.

  • ShagNasty||

    Yeah time and newsweek are getting so pathetic it really is kind of sad. First "Why are Obama's critics so bumb?" Then "The first gay president," and now this. Anyone wanna take bets on how soon one of these mags will run an issue with their editor-in-chief deepthroating obama on the cover?

  • Skid Marx||

    OT, but here's what I don't get. JP morgan loses $2B and the feds want to create more regulation. And yet, when the Postal Service Loses $3.2 Billion in Jan-March, the Feds throw up their hands saying there's nothing they can do.

  • Hugh Akston||

    It's times like this I'm glad I don't have health insurance.

  • The Derider||

    Bush did the same thing with tax rebates.

  • ||

    Tax rebates aren't even in the same ball park as making a company give rebates attached with a note that says it's cause of the president.

    But they ARE both shitty ways of pandering.

  • Another David||

    Geez, at least Bush had the decency to use government money for the bribe.

  • fried wylie||

    What the fuck.

    At this point I want Obama to get re-elected just so he has another chance at impeachment.

  • WhatAboutBob||

    My insurance premium just went up 16% so I won't be impressed by any rebate check.

  • Ministry of Sophistry||

    My Health Insurance consists of a pack of day of Marlboro's and Pirate Themed liquor from the bottom shelf. Fuck me if I'm gonna Win the Future these asshat's envision.

  • R||

    I think if I were an insurance company, I'd "accidentally" delay the release of the rebates until after Nov. 2nd. Even if it brings a big fine, it'd be totally worth it.

  • LarryA||

    So because of Citizens United all these evul corporations are out there campaigning...

    Oh, wait.

GET REASON MAGAZINE

Get Reason's print or digital edition before it’s posted online

  • Progressive Puritans: From e-cigs to sex classifieds, the once transgressive left wants to criminalize fun.
  • Port Authoritarians: Chris Christie’s Bridgegate scandal
  • The Menace of Secret Government: Obama’s proposed intelligence reforms don’t safeguard civil liberties

SUBSCRIBE

advertisement