Trump Misleads on Insurer Profits

President Donald Trump has claimed that under the Affordable Care Act, insurance companies have “taken advantage of this country” and “made a fortune,” which he “stopped” by ending payments for cost-sharing subsidies on the ACA marketplaces. That’s misleading, at best, for several reasons.

• Health insurers have made money – an increase in net income of 46 percent from 2015 to 2016 – according to a report from the company A.M. Best. But that was in spite of, not because of, the ACA marketplaces. “They did lose millions and millions” in Obamacare, Doniella Pliss, associate director at A.M. Best, told CNN Money.
• Trump pointed to the increased stock prices of four companies, but two of them, Humana and Aetna, pulled out of the ACA marketplaces for 2018. The other two — Anthem and Cigna — have pulled out of some states and counties.
• The ACA limits the amount of profit insurers can make. At least 80 percent of premiums toward covering health costs. The rest can go toward administrative costs, profits, marketing and salaries. If insurers don’t meet those requirements, they have to $400 million in 2015, with $107 million of that going to consumers on the individual market.