Care Over Profits Act of 2026
- Bill Number
- H.R. 7861
- Origin Chamber
- House
- Congress
- 119th Congress, Session 2
- Policy Area
- Health
- Status
- Introduced
- Latest Action
- 2026-03-09: Referred to the House Committee on Energy and Commerce.
- Last Updated
- 2026-04-02T18:44:32Z
AI-Generated Summary
Purpose of the Legislation
The "Care Over Profits Act of 2026" aims to reform aspects of health insurance under the Affordable Care Act (ACA) by requiring insurers to spend a higher portion of premiums on medical care (rather than profits or administrative costs) and by strengthening penalties to prevent fraudulent enrollment in government-subsidized health plans. This seeks to prioritize patient care and reduce scams in the individual and small group insurance markets.
Key Provisions
- Increase in Medical Loss Ratio (MLR): Insurers offering plans in the individual and small group markets must now spend at least 85% of collected premiums on medical care and quality improvement, up from the previous 80%. (MLR is a measure of how much of premium dollars go directly to healthcare services versus other expenses.)
- Penalties for Agents and Brokers:
- For negligent errors in providing enrollment information (e.g., incorrect details on applications for qualified health plans through state or federal insurance marketplaces, known as Exchanges), civil fines range from $10,000 to $50,000 per affected person.
- For knowing and willful fraud (intentionally providing false information), civil fines can reach $200,000 per affected person, with procedures similar to those under Social Security Act enforcement.
- Criminal penalties include fines under federal law and up to 10 years in prison for willful fraud.
- Effective Dates: The MLR change applies to plan years starting January 1, 2026. The penalty provisions apply to enrollments for plan years starting January 1, 2027.
Significant Changes to Existing Law
- Amends Section 2718 of the Public Health Service Act to raise the MLR threshold from 80% to 85% specifically for individual and small group markets, building on ACA rules that already required MLRs but with a lower minimum.
- Expands Section 1411 of the ACA by adding targeted penalties for insurance agents and brokers (intermediaries who help people sign up for plans), which were not previously specified at this level. Existing penalties for general misinformation remain but are clarified to exclude or differentiate agents/brokers, and new criminal sanctions are introduced for fraud.
Potential Impacts
- On Government Agencies: The Department of Health and Human Services (HHS), which oversees Exchanges and enforces ACA rules, may face increased administrative workload in investigating fraud and collecting penalties, potentially leading to more resources needed for oversight.
- On Citizens: Consumers could benefit from more premium dollars going toward actual healthcare (possibly resulting in lower premiums or higher rebates if insurers fall short of the MLR), and reduced fraud may make enrollment safer and more trustworthy, protecting subsidies for low-income individuals.
- On International Relations: No direct impacts, as the bill focuses on domestic U.S. health insurance markets.
- Broader Effects: Insurers might adjust pricing or operations to meet the higher MLR, while fraudulent enrollments could decrease, saving taxpayer money on improper subsidies.
Main Stakeholders Affected
- Health Insurers: Must comply with the stricter MLR, potentially squeezing profits and requiring more efficient operations.
- Agents and Brokers: Face new financial and criminal risks for errors or fraud, which could lead to stricter training or fewer bad actors in the industry.
- Consumers and Enrollees: Individuals buying insurance through Exchanges, especially in small businesses or personally, gain stronger protections against scams and better value from premiums.
- Government Entities: HHS and state-based Exchanges will enforce rules and handle penalties, affecting federal and state budgets.
Notable Legal, Constitutional, or Political Implications
- Legal: Strengthens enforcement under the ACA without altering its core structure, using existing civil and criminal frameworks (e.g., referencing Social Security Act procedures). It promotes accountability for third-party actors like brokers, potentially reducing litigation over enrollment disputes.
- Constitutional: Aligns with Congress's authority to regulate interstate commerce and health policy under the Commerce Clause; no apparent challenges to due process or free speech, as penalties target negligent or intentional misconduct.
- Political: Highlights ongoing debates over ACA reforms, emphasizing consumer protection and anti-fraud measures, which could appeal to bipartisan interests in curbing waste while pressuring insurers to prioritize care over profits. May influence future healthcare funding discussions by addressing enrollment integrity.
This summary was generated by AI and may contain inaccuracies. Refer to the official source document for the authoritative text.
Sponsor
Cosponsors (1)
Recent Actions
- 2026-03-09: Referred to the House Committee on Energy and Commerce.
- 2026-03-09: Introduced in House
- 2026-03-09: Introduced in House
Bill Versions
- Care Over Profits Act of 2026 — issued 2026-03-09 — PDF (6 pages)