It was recently reported that in 2010 the top health insurance companies in the
According to Stark, Cigna, Humana and United Health managed to raise their profits by more than $3.5 billion by increasing premiums.
Rep. Stark is calling for healthcare reform conditions 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. The health reform law protects from unjustified premium hikes, while ensuring that premium dollars go primarily to medical care, not profits.”
On the other side of the issue, the nation’s health insurance lobby is claiming that industry profit margins have been in a gradual decline over the last five years. They compare insurers’ average profit margins (4.9%) to the healthcare sector (21%) and pharmaceutical companies (16%).
In an effort to stop potentially out of control premium increases, the Department of Health and Human Services announced last month $200 million in grants to assist states in setting up programs to monitor unreasonable rate hike proposals.
Starting in 2014, with the new state-run health insurance exchanges opening, insurers that demonstrate a pattern of unreasonable rate hikes run the risk of being prohibited from offering plans. New rules will also force insurers to spend 80%, if not more, of premium dollars on healthcare services.