Insurers expect to issue $759.2 million in medical loss ratio rebates this year, according to a new analysis.
The report is based on data reported by payers to states and compiled by analytics firm Mark Farrah Associates. An analysis of the data from KFF projects that total rebates paid out since their 2012 launch will rise to $15.1 billion after 2026 payments are made later this year.
Through 2025, $14.4 billion in rebates have been paid out. Insurers are required under the Affordable Care Act to spend at least 80% of premiums on medical care in individual and small group plans, with any excess profits or margins reimbursed to enrollees or employers through annual rebates.
The MLR is higher for large group plans at 85%, KFF said. Rebates are based on a three-year average, meaning 2026's tally is based on data from 2023, 2024 and 2025.
The estimated 2026 rebate tally is the lowest since 2018, when insurers paid $706.7 million in rebates, according to the KFF report. Rebate payments peaked in 2020 at $2.5 billion.
Rebates also hit $2 billion in 2021. KFF said these records were the result of the elimination of cost-sharing reduction (CSR) payments, which drove up premiums and thus far higher margins for insurers in the individual market.
"In the years following 2018, insurers largely held premiums flat or reduced them as claims cost[s] rose and caught up to premium levels, compressing margins and bringing rebate totals down significantly from those peaks," the researchers wrote.
"The current rebate environment reflects this period of margin normalization rather than continued insurer profitability stemming from the earlier CSR-related premium increases," they said.
The report said that 2025 rebates were sent to 5.1 million people enrolled in individual market plans and 3.5 million with employer coverage. Average payments were $233 per person in individual plans, $190 per person in the small group market and $91 in the large group market.
Premiums for the 2026 plan year jumped significantly, the steepest rate since 2018 when policy uncertainty similarly impacted the exchanges. This could lead rebates to increase down the line if it's determined that plans overpriced their premiums relative to medical spend.
The average simple loss ratio—which does not account for taxes or quality improvements like the MLR used to calculate rebates—was 93% in 2025, meaning plans spent 93% of their premium income on claims on average. This is an indicator that payers were less profitable in 2025 amid the uncertainty.
Given that rebates are based on multiple years of data, plans that were struggling last year may still owe rebates in 2026, the researchers said.
"Consequently, even insurers with high loss ratios in 2025 may expect to owe rebates if they were highly profitable in the prior two years," they wrote.