Congressman John Garamendi

Representing the 3rd District of California
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Congressman Garamendi’s Statement on New Regulation Requiring Health Care Companies Spend 80 Percent of Premiums on Patient Care

November 23, 2010
Press Release

FAIRFIELD, CA – Congressman John Garamendi (D-Walnut Creek, CA), California’s Insurance Commissioner for eight years, is pleased to report that important new regulations were implemented yesterday by the Department of Health and Human Services as part of the Patient’s Bill of Rights approved by Congress earlier in the year. Known as the "Medical Loss Ratio," these regulations require health insurers to spend 80 to 85 percent of consumers’ premiums on direct care for patients and efforts to improve care quality. Congressman Garamendi issued the following statement:

“We must protect consumers. For too long, we’ve allowed far too much of our health insurance premium dollars to go to unnecessary expenses. When insurance companies pay for wall-to-wall advertising and fat cat bonuses, they’re taking that money out of our pockets.

“No more. Now health insurers are required to spend at least four-fifths of your premiums on your health coverage. This is just one of the ways the Patient’s Bill of Rights is improving health care access for all Americans.

“I have no doubt that the insurance companies will still do all they can to maximize their profits, and that’s why we must remain vigilant. When the insurance industry puts profits over people, I will not hesitate in calling them out on their abusive, anti-consumer behavior.

“The Patient’s Bill of Rights was the most significant expansion of health care in America since the establishment of Medicare. Democrats in Congress ended lifetime limits in health coverage. We broadened access to preventative care without copays. We offered seniors in the Medicare Part D prescription drug donut hole immediate relief while completely closing the drug coverage gap in a few short years. Today is another important step on America’s road to a healthier tomorrow.”