Cardin Announces Over $17 Million in Health Insurance Refunds for Maryland Consumers

80/20 rule in the Affordable Care Act gives Marylanders an average refund of $140 and better value for their health care dollars

WASHINGTON – U.S. Senator Ben Cardin (D-Md.) and Health and Human Services Secretary Sylvia M. Burwell announced today that 206,102 consumers in Maryland will benefit from $17,265,604 in refunds from insurance companies this summer, averaging $140 per family, because of the Affordable Care Act (ACA).

Created by the ACA, the 80/20 rule, also known as the Medical Loss Ratio (MLR) rule, requires health insurers to spend at least 80 percent of premium dollars on patient care and quality improvement activities. If insurers spend more than 20 percent on profits, marketing, and salaries, they owe a refund to consumers.

“Before the Affordable Care Act, many insurers did not provide true value for the premium dollars they collected from consumers. We decided to include Medical Loss Ratio provision to hold insurers accountable by ensuring that Americans get a rebate when companies don’t meet “a fair standard of value. As a result of the MLR,  9 million Americans are finally able to purchase quality, affordable health care, rather than paying for exorbitant salaries, executive bonuses, or other non-health-related costs,” said Senator Cardin, a member of the Senate Finance Committee.

“The 80/20 rule is bringing much needed transparency and competition to the health insurance market, ensuring that consumers will receive value for their premium dollars,” said Secretary Burwell.  “Standards like these created under the health care law are providing Marylanders with immediate savings and are helping to keep costs down over the long-term.”

Nationwide, consumers have saved a total of $9 billion on their health insurance premiums since the 80/20 rule took effect.  Last year alone, consumers nationwide saved an estimated $3.8 billion because of reduced premiums as insurance companies operated more efficiently.  Additionally, consumers nationwide will receive $330 million in refunds, with 6.8 million consumers due to receive an average national refund benefit of $80 per family.

Since the MLR standard took effect, more insurers year after year are meeting the 80/20 rule by spending more of the premium dollars they collect on patient care and quality improvement..

According to HHS, Marylanders will see their value reflected in one of the following ways:

  • a refund check in the mail;
  • a lump-sum reimbursement to the same account that was used to pay the premium;
  • a reduction in their future premiums; or
  • if the consumer bought insurance through their employer, their employer must provide one of the above options, or apply the refund in another manner that benefits its employees, such as more generous benefits.

Sen. Benjamin Cardin