Major U.S. Health Insurers Report Big Profits, Benefiting From the Pandemic
"Consumers are probably entitled to millions of dollars in rebates under Obamacare rules that cap companies’ profits. The companies’ staggering pandemic profits stand in stark contrast to the scores of small medical practices and rural hospitals that are struggling to stay open. And the earnings are putting a spotlight on the big insurance companies at a time when government officials in many states are facing massive budget shortfalls as businesses collapse, unemployment rises and tax revenues plummet. Some states are discussing cutting payments to insurers that offer Medicaid plans to their residents."
"The companies’ staggering pandemic profits stand in stark contrast to the scores of small medical practices and rural hospitals that are struggling to stay open. And the earnings are putting a spotlight on the big insurance companies at a time when government officials in many states are facing massive budget shortfalls as businesses collapse, unemployment rises and tax revenues plummet. Some states are discussing cutting payments to insurers that offer Medicaid plans to their residents."
"Under the federal health care law, insurers are required to use a fixed percentage of the money they take in from premiums for their customers’ medical expenses. The companies must spend at least 80 cents of every dollar they collect in premiums from small businesses and individuals on health care, and 85 cents per dollar for large employers. The remaining 15 to 20 percent is all they are allowed under the Affordable Care Act to spend on administrative costs like overhead and marketing and to keep as profit. Any additional revenues are to be returned to consumers in the form of rebates."
"Insurers are currently spending a far lower portion of premium revenue on their customers’ health care costs. CVS said its medical-benefits ratio was 70 percent for the quarter, compared to 84 percent in the same period of 2019. That translates into millions of dollars that some lawmakers in Congress and advocates say should wind up in the pockets of consumers."
https://www.nytimes.com/2020/08/05/health/covid-insurance-profits.html#click=https://t.co/Vqegzqh2ok
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