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Coins balanced on beam The argument then goes that the only way carriers can increase their level of profit is to “allow” (or some say “intentionally drive”) total costs/premiums to increase. (Photo: Shutterstock)

I can’t even begin to count the number of times I’ve read on LinkedIn or heard in live presentations that the BUCAH carriers are actually incentivized to have rates/costs go up.

The argument is based on the ACA’s MLR provision that requires that carriers spend at least 80 percent (individual and small group) or 85 percent (large group) of collected premiums on claims. That means that the carriers are limited to between 15 percent and 20 percent of collected premiums to cover their administration costs, including their profit.

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