Individual market insurers arethe ones on the hook for the bulk of the refunds—a total of nearly$2 billion, according to preliminary estimates.

Consumers are expected to reap the rewards of excessive premiumsover the last few years, according to a new analysis from the Kaiser Family Foundationthat said premium rebates should hit a record $2.7 billion thisfall.

The result of the Affordable Care Act's medical loss ratioprovision, which requires insurers to spend at least 80 percent oftheir premium income (85 percent for large group plans) on claimsand quality improvement over the past three years, the rebate totallast year was $1.3 billion—a record at the time.

Related: Insurers to pay out record $1.3 billion in MLRrebates

But this year is expected to come in at more than twice thatamount. Insurers that fail to spend the required amount on claimsand quality improvement are obligated to refund the difference asrebates.

Individual market insurers are the ones on the hook for the bulkof the refunds—a total of nearly $2 billion, according topreliminary estimates. That will result in an average refund of$420 per customer in that market, after excessively high premiumsbased on fears about the marketplaces and possible repeal of theACA in 2018 and 2019, which turned out to be highly profitable,meant that insurers did not meet the required spendingthresholds.

The money may come in the form of checks to consumers or insteadbe applied as a credit to premiums they have to pay. For those whoare covered through their employers, the rebate may end up gettingsplit between employer and employee.

Because of the millions of people losing both their jobs andtheir health coverage this year, qualifying them for a specialenrollment period, it's expected that enrollment in individualmarket plans will rise—although these same people wouldn't qualifyfor rebates issued this year unless they were also enrolled in2019.

Final information on the dollar amount of rebates will be issuedin the fall.

While no information is yet available on the potential for 2020,the coronavirus effect on coverage will undoubtedly have someinfluence on rate setting for 2021. While the cost to insurers forcovering coronavirus treatment are still unknown, it could amountto tens if not hundreds of billions of dollars, the reportsays.

However, despite that, the fact remains that hospitals andoutpatient offices are canceling elective procedures and people aredelaying or forgoing other care because of worries over getting thevirus and reduced access to care because of the need for socialdistancing. The report points out that "Even if individual marketinsurers experience losses in 2020, it is entirely possible theywill owe rebates in 2021 because those rebates will be based on2018 and 2019 experience as well."

Read more: 

• MLR has saved consumers $5billion
• Low 2016 individual health margins trimmedinsurers' rebate bills
• 7 ways brokers can be excluded fromMLR