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Sarbanes Announces More Than $27 Million in Health Care Savings for People in Maryland

Press Release

Location: Washington, DC

U.S. Congressman John P. Sarbanes (D-Md.) today announced more than $27 million in health care savings for people in Maryland as a result of the Affordable Care Act 80/20 rule. These rebates will be distributed to more than 140,000 Marylanders and will result in an average rebate of $340 for each qualifying family.

"The health reform law ensures consumers a fair deal in return for the premiums they pay each month," said Congressman Sarbanes, a member of the House Energy and Commerce Committee, which has jurisdiction over health care policy. "Insurance companies are now required to invest a reasonable amount of the premiums they collect in better health services and more access to care -- not sink it in slick advertising, executive pay, and a healthy bottom line. Consumers will also have new tools to determine which insurers best limit administrative costs and invest in medical care."

The Affordable Care Act 80/20 rule, also known as the Medical Loss Ratio (MLR) standard, requires insurance companies to spend at least 80 percent of consumers' premium dollars on medical care and quality improvements.

Insurers can spend the remaining 20 percent on administrative costs, such as salaries, sales, and advertising. Beginning this year, insurers must notify customers how much of their premiums have been spent on medical care and quality improvement.

Insurance companies that do not meet the 80/20 standard must provide their policyholders a rebate for the difference no later than August 1st of this year.

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