Profits In Health Insurance Under Obamacare

Few people understand that most profits from health insurers stem from their return on investing their pool of premium dollars while awaiting those dollars being paid out in claims months or even years after being collected. Wharton School insurance expert Scott Harrington calculates that in 2013, insurers in the individual (nongroup) insurance market overall earned negative pre-tax profits of 3.1% on the premiums they collected. That is, they actually lost 3.1 cents for every premium dollar collected, but they presumably made these losses up from their underwriting gains for group coverage as well as returns on investments.

http://www.forbes.com/sites/theapothecary/2014/06/27/profits-in-health-insurance-under-obamacare/#64ed6e0f4c42