Some Maryland consumers will receive a check from their insurance company this summer. How’s that for a nice change of pace?
Federal officials announced Thursday that 206,102 Marylanders will receive a modest refund — an average of $140 per family — from their insurer, thanks to a provision in the Affordable Care Act called the Medical Loss Ratio, or the “80/20 rule.”
That rule requires insurance companies to spend at least 80 percent of revenue generated by consumers’ premiums on patient care and quality improvement activities. Only 20 percent of premium dollars may be spent on administrative expenses or listed as profit.
If insurers violate that rule (for whatever reason), they owe money back to their beneficiaries.
Refunds to Maryland consumers will total about $17.3 million this year, the Department of Health and Human Services said. The size of the refund depends on the carrier and the kind of insurance.
For example, the average refund for Marylanders who have insurance through a small-business employer is only $7. Marylanders insured in the large-group market (big employers) will receive an average refund of $157.
Nationwide, 6.8 million people are due to receive $330 million in refunds, the average being $80 per family.
In Maryland, 11 insurance companies owe refunds, usually only in one or two of the three markets (individual, small-group and large-group).
The largest insurer in the state, CareFirst BlueCross BlueShield, does not owe refunds to consumers, according to federal data.