Rep. Stark: Insurers raked in $12B profit
Stark, the ranking member of the House Ways and Means health subpanel, touted healthcare reform provisions that require greater transparency from insurers.
“While insurance companies were proposing double-digit premium increases on consumers, they were earning billions in profits at the same time,” Stark said in a statement. “The health reform law protects consumers from unjustified premium hikes, while ensuring that premium dollars go primarily to medical care and not profits.”
The nation’s health insurance lobby Thursday afternoon downplayed the report, saying that industry profit margins have been generally declining since 2005. America’s Health Insurance Plans said the insurers’ average profit margins (4.9 percent) are slim compared to pharmaceutical companies (16 percent) and the entire healthcare sector (21 percent).
The Department of Health and Human Services announced $200 million in grants Thursday to help states set up programs to scrutinize “unreasonable” rate hike proposals. Insurers that show a pattern of excessive rate hikes can be banned from offering plans in new state-run health insurance exchanges opening in 2014.
New medical-loss ratio rules also require insurers to spend at least 80 percent (85 percent in the large group market) of premium dollars on healthcare services.
This article was updated at 4:37 p.m. with AHIP’s response.