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Excellus surpasses Affordable Care Act expectations

Rochester Business Journal
May 30, 2012

Excellus Blue Cross Blue Shield last year exceeded Affordable Care Act provisions requiring health plans to spend most of each premium dollar on enrollees’ medical expenses, Excellus officials said Wednesday. 

The act calls for health insurers to spend minimum amounts of premiums collected to pay claims. The minimums vary by state. In New York, the law calls for 82 cents of each premium dollar collected from direct-pay and small group subscribers and 85 cents of each premium dollar collected from large group enrollees to be spent on medical expenses.

Excellus reported spending 93.4 cents of each of direct-pay premium dollar on claims and 90.9 cents of each dollar collected from of small and large group enrollees last year, topping the Affordable Care Act minimum by $225 million. 

Insurers that pay out less than threshold amounts act are supposed to issue refunds to subscribers to make up the difference.  According to a Kaiser Family Foundation estimate, U.S. Health plans are on track to issue $1.3 billion in rebates for 2011 claims-spending shortfalls. New York State subscribers account for $10.5 million of that total, which includes some $4 million in already paid refunds.

Anticipating the Affordable Care Act provision by a year, New York passed a state law in 2010 requiring insurers to spend at least 82 cents of every premium dollar on medical expenses. Eleven insurers including Excellus were ordered last year to pay a total of $114.5 million in refunds under the state provision. Excellus’ share of that payout came to $21.4 million. 

 (c) 2012 Rochester Business Journal. To obtain permission to reprint this article, call 585-546-8303 or email

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