The U.S. Department of Health and Human Services announced last week that more than 14,000 Montana consumers would receive $2.7 million in refunds from health insurance companies as part of the Affordable Care Act.

The rule allowing for the refunds, the “80/20” rule, stipulates that insurance companies must spend 80 percent of all premium dollars on patient care and quality improvement activities.

Any money less than that 80 percent spent on profits or administrative costs must be refunded. 

A total of 14,170 Montana consumers will get refunds of $2,719,595 from the insurance companies, for an average of $286 per family. This rate is the third-highest in the country, behind only Alaska and Minnesota.

Americans can expect $330 million in refunds overall to 6.8 million consumers as a result of the 80/20 rule, an average of $80 per family.

The 80/20 rule was put into the Affordable Care Act, also known as Obamacare, to stymie growing insurance premiums and keep the companies running efficiently.

Health and Human Services Secretary Sylvia Burwell said the rule has brought transparency and competition to the insurance market. Consumers are receiving more value for the premium dollar, she said.

Besides the $330 million in refunds, the department estimates consumers nationwide have save a total of $9 billion on health insurance premiums since the 80/20 rule was instated. 

Other standards in the Affordable Care Act, such as a required review of proposed premium increases, are also intended to lower costs for consumers.

The refunds are available in a variety of ways, including a refund check in the mail, a lump-sum reimbursement to a previously used card account, a reduction in future premiums or an employer using the refunds to improve health coverage.

Reporter Ryan Murray may be reached at 758-4436 or by email at rmurray@dailyinterlake.com.