Highlight on Massachusetts: Check is in the mail: Residents to receive $15 mil in ACA refunds


Massachusetts residents received good news last week, in that they can expect more than $15 million in health insurance refunds this year as a result of measures included in the Patient Protection and Affordable Care Act (ACA) (P.L. 111-148). Massachusetts consumers will receive the second-highest refund out of all 50 states, with an average of approximately $133 per family.

Across the country, 6.8 million consumers saved approximately $4.1 billion on health insurance premiums in 2013, according to a recent report. These consumers are now set to receive $332 million in refunds, which means that each family will receive approximately $80 on average. The total refund Massachusetts consumers will receive is second only to Florida, where consumers will receive more than $41.5 million.

Individuals who shopped for their own insurance on the Massachusetts Health Insurance Exchange can expect to receive a refund of $100 per family, on average. Consumers insured through small businesses with employee numbers ranging from 2 to 50 can expect to receive $112 per family and those who received coverage through the large group market, via employers with over 50 employees can expect to receive $315 on average per family.

Medical Loss Ratio

 The Medical Loss Ratio rule of the ACA put consumer protections in place within the insurance market. These protections require individual and small group market insurance companies to spend at least 80 percent of the premiums consumers pay on medical care or to improve health care quality. This is called the 80/20 rule. In the large group insurance market, that ratio is 85/15.

“The 80/20 rule is bringing transparency and competition to the insurance market, ensuring that consumers are continuing to receive value for their premium dollars,” said Health and Human Services Secretary Sylvia M. Burwell in a statement. “Standards like these created under the health care law are providing Massachusetts residents with immediate savings and are helping to keep costs down over the long-term.”

There’s been a visible shift in the value consumers get from their insurance premiums, especially in the individual insurance market, since 2011, when the 80/20 ratio was enacted. The most dramatic shift according to HHS data was in individual insurance market. In 2011, approximately 62 percent of enrollees received upfront value from their insurance plans. That figure jumped up to approximately 81 percent of individual market enrollees in 2013. HHS estimates that consumers have saved $9 billion since 2011.


If an insurer did not spend enough premium dollars on patient care and quality improvement, they must pay refunds to consumers in one of the following ways:

  • a refund check in the mail;
  • a lump-sum reimbursement to the same account that was used to pay the premium;
  • a reduction in their future premiums; or
  • if the consumer bought insurance through their employer, their employer must provide one of the above options, or apply the refund in another manner that benefits its employees, such as more generous benefits.