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Under rules calling for health insurance carriers to spend minimum percentages of premium dollars on medical claims, the state has ordered four New York health insurers including Excellus BlueCross BlueShield to send refund checks to Medigap policyholders, Gov. Andrew Cuomo said Thursday.
Excellus’ refunds to 427 policyholders total $$314,979. Other companies ordered to make payouts are:
Medigap policies are private insurance sold to cover the 20 percent of medical expenses traditional, government-administered Medicare policies do not pay for.
New York insurance law demands that non-profit insurers such as Excellus spend at least 80 percent of premium dollars to pay subscribers’ medical claims. For-profit carriers are required to spend 65 percent of premium dollars on claims. Companies that do not meet the standards have to send refund checks to policy holders.
New York passed the claim-expense rule prior to the Congress’ passage of the Affordable Care Act, which contains similar provisions.
“My administration will continue to work to protect New York consumers by holding insurance companies accountable and we are pleased to deliver these refunds back to our seniors,” Cuomo said.
James Redmond, vice president of communications at Excellus, said all health plans are annually required to report the amount of medical benefits paid out to consumers in relation to premiums collected.
“If a health plan incorrectly estimated the amount of benefits it would pay out in proportion to the premiums it collected during the year, it issues refunds to consumers when benefit payments don't meet certain threshold amounts. That's what happened here,” Redmond said.
“We had lower-than-anticipated medical expenses for some Medicare Supplemental A policies in the prior year, so we are mailing out refunds to customers. It is an annual adjustment process that we support,” he said. “It's that simple."