Turning Health Insurers Into Co-ops

One provision of HR 3200 that has gotten little play is Section 116. “Ensuring Value and Lower Premiums.”  This section provides:

A qualified health benefits plan shall meet a medical loss ratio as defined by the Commissioner.  For any plan year in which the qualified health benefits plan does not meet such medical loss ratio, QHBP offering entity shall provide a manner specified by the Commissioner for rebates to enrollees of payment sufficient to meet such loss ratio.

Unless I’m reading this wrong, this provision effectively places a cap on insurance company profits.  Given that all insurance plans must meet the requirements of a qualified health benefits plan, and the profits of the insurers can earn on those plans are capped, health insurers will, at best, become the equivalent of utilities, and at worst will simply disappear as the profit margins don’t warrant staying in the business.