Health insurance companies do not keep 50 cents of every premium dollar as profit, Craig Dunn, a financial planner with Liberty Financial said.
“That is a major myth,” he said. “In fact, health care insurance margins are generally under 5 percent. In 2009, when the Affordable Care Act was passed, United Health, WellPoint and Aetna profit margins were all below 4.5 percent.”
Dunn said in 2012, the ACA began requiring the 80/20 rule and insurance companies are also now required to publicly justify rate increases.
Young said Rate Review is the provision of the ACA that protects consumers from unreasonable rate increases.
“Insurance companies must now publicly justify any rate increase of 10 percent or more before raising premiums,” she said. “However, this does not apply to grandfathered plans.
“Although it is not yet clear how consumers can question rate increases,” Young said, “it is the intention of the ACA to make the process more transparent and fair.”
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