H.R. 7861: Care Over Profits Act of 2026

This bill, known as the Care Over Profits Act of 2026, aims to reform certain aspects of health insurance regulation, particularly focusing on medical loss ratios and enrollment practices in qualified health plans. Below are the main provisions outlined in the bill:

1. Increase in Medical Loss Ratio

The bill intends to increase the minimum medical loss ratio (MLR) for health insurance coverage in small group and individual markets from 80% to 85%. The MLR is a measure of the percentage of premium revenues that insurance companies spend on medical care and health services, as opposed to administrative costs or profits. This change would require insurance companies to allocate a larger portion of premiums toward actual healthcare expenses, beginning with plan years that start on or after January 1, 2026.

2. Penalties for Agents and Brokers

The bill introduces new penalties for agents and brokers who are involved in the enrollment process for qualified health plans. Key elements include:

• Negligence Penalties: If an agent or broker fails to provide accurate information during the enrollment process due to negligence, they could face civil penalties ranging from $10,000 to $50,000 for each individual affected.
• Knowing and Willful Violations: If agents or brokers knowingly provide false or fraudulent information, they could face substantially higher penalties, including civil penalties up to $200,000 for each individual affected, and potential criminal charges which could lead to fines or imprisonment for up to 10 years.

These changes to penalties would apply to applications for enrollment starting on or after January 1, 2027.

3. Goals of the Legislation

The overarching goal of the Care Over Profits Act is to enhance consumer protection in the health insurance market by ensuring that a greater share of premium dollars goes towards healthcare services rather than administrative costs and profits. Additionally, strengthening penalties against agents and brokers aims to discourage fraudulent practices during the enrollment process, thereby fostering a more reliable health insurance system.

Relevant Companies

• CNC (Centene Corporation) - As a major provider of health insurance, Centene may be directly influenced by changes in medical loss ratio requirements, potentially impacting their financial practices and overall profitability.
• ANTM (Anthem, Inc.) - Adjustments to medical loss ratios may also affect Anthem's operations, significantly influencing the way they manage and report insurance premiums and healthcare expenditures.
• HUM (Humana Inc.) - Similar to other insurers, Humana will need to adapt its business strategies to comply with new MLR regulations, which will affect its pricing, claims handling, and market competitiveness.