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In a famous “Laugh In” sketch, Lily Tomlin, playing arrogant operator Ernestine, telephones a customer to demand payment of $23.64 for three calls to Topeka and threatens to send a burly serviceman to the customer’s house to rip his phone out of the wall if he doesn’t pay.

Ernestine was the face of smug and uncaring Bell Telephone. Today, she’d be the mug of cocky and cold-hearted health insurers.

In the 1960s skit, when the telephone customer complains about Ernestine having access to his confidential financial and tax records, she says of the telephone company:

“We are not subject to city, state or federal regulations. We are omnipotent.”

Back in the days of “Laugh In,” the customer who Ernestine wrongly accused of owing $23.64 had no recourse. Today, however, because of ObamaCare, the client could call Ernestine and demand a refund. Nearly 16 million health insurance consumers will get rebates totaling an estimated $1.3 billion beginning Aug. 1 because ObamaCare limits the profits that insurance companies can make off of illness, injury and pain.

Take that, Ernestine!

Under ObamaCare, more formally known as the Affordable Care Act, insurers must send refunds to customers if the companies skim off excessive portions of premium payments for administrative costs and profits. For big group plans, the law says insurers must spend 85 percent of premiums on patient care. For smaller group plans and individual coverage, it is 80 percent.

This rule took effect in 2011, so insurance companies that spent too little last year on patient care must send rebates to customers this year. One New Jersey company reported it already has returned $19 million to customers. (more…)

Florida Gov. Rick Scott wants to cheat the families of his state out of $140 million in health insurance rebates. If Scott gets his way, it could harm consumers across the country.

Ripping off consumers and the health care system isn’t new to Florida Gov. Rick Scott. He got rich leading a hospital company that paid a record $1.7 billion in criminal fines and civil penalties to the Justice Department for systematically defrauding federal health care programs. Scott went on to lead a high-profile campaign against health reform backed by the infamous right-wing billionaire Koch Brothers, and Scott used that campaign as a springboard to the governorship.

Now Scott wants his state to be exempted from federal rules that would require insurance companies to send $140 million in premium rebates to families over the next three years. Enter the big winners, the health insurance companies that will get the money instead of Florida’s hard-working families.

Under the Affordable Care Act (ACA) enacted last year, health insurers that fail to spend at least 80% of your premiums on actual health services must give the difference back to consumers.This is one of the best and possibly least known provisions in health care reform. It requires insurance companies to become more efficient and keep less money for profits and CEO salaries. It says that people paying premiums should get more value for their money.

The goal of the rule isn’t to force companies to pay consumer rebates, it’s to hold insurance companies accountable and get them to change their behavior. But if they don’t, they’re supposed to pay, and they shouldn’t get off the hook just because they like their profits more than the new law. They should not be rewarded for failing to meet a basic standard because they can get politicians like Scott to take their side.

And let’s not forget the most important thing: While insurance companies are making record profits, struggling families are desperate for relief. The people of Florida need the $140 million they’re owed. But consumers won’t get their money if Rick Scott gets his way. The Republican governor — who’s been doing everything in his power to thwart implementation of the ACA — has been shamelessly trying to manipulate the law to pad the pockets of a private health insurance industry that will collect $934 billion in premiums this year. (more…)

While the Republican candidates for President made it clear in their debate this week that they are happy to let uninsured people die if they have a serious illness, the Republicans in Congress are plotting to make people with insurance pay even more for their coverage to boost insurance company profits. How? By stealing nearly $2 billion in rebates that insurance companies owe consumers and small businesses and giving the money back to the insurers.

At a time when families are struggling to make ends meet, this would be an astonishing transfer of money from consumers to the already overflowing coffers of the health insurance industry, whose top five companies alone made $11.7 billion in 2010. (more…)

By James Parks
AFL-CIO Senior Writer

Big insurers spent millions to try to gut a proposed new rule that requires they spend a certain amount of premium dollars on actual medical care. But American families and businesses are coming out on top.

The U.S. Department of Health and Human Services (HHS) last week issued a new rule—known as “medical loss ratio”—that will require health insurance companies to spend 80 percent to 85 percent of your health care insurance premiums on making you healthier instead of overhead costs like advertising or executive pay.

Last month, big insurers sent more than 1,000 executives and lobbyists to the National Association of Insurance Commissioners (NAIC) meeting in Orlando to try and get the rule changed, according to the coalition, Health Care for America Now (HCAN).

AFL-CIO state federation officers actively lobbied their state insurance commissioners to listen to working families and their unions and to not give in to the big insurers’ push to stop the regulation. Their efforts played a significant role in making the rule a reality.

HCAN Executive Director Ethan Rome says the new rule will change the way health insurance companies do business and end such unconscionable abuses as denying people coverage because they are sick. He adds:

When the Republicans call for repeal (of health care reform), they’re talking about throwing out rules like this one and putting consumers at the mercy of the insurance companies again. The Republican repeal-mongers are not only on the wrong side, they’re also just plain out-of-touch with the needs of businesses to move forward and the desires of consumers to have better care.

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Re-posted from the AFL-CIO Now Blog