Not splitting hairs with you Louis, but Obamacare provides ratio's for claims (as a percent of premium).
The MLR for IFP is 80% of premium so the only requirement is the carrier must pay out 80% of premium in claims. If their overhead is 25% of premium there is no profit.
DC doesn't care, nor does it guarantee a profit. As long as the carrier pays out at least 80% in claims that is all that matters.
Agreed.. The 80% return in claims payout is the operative phrase .. The 20% would certainly not be all profit as there are expenses to be considered.