Health care reform had many health insurance companies worried particularly because of a mandate which would require insurers to spend a certain percentage of the premiums they collect on care related costs.  There is some good news according to the article “Health Insurers Adjust to Once-Scary Reform Rule” by Tom Murphy on ABCNews.com.  Two major health insurance companies, Cigna Corp and Aetna Inc, both say their profits could grow in 2011 and Aetna even plans to start paying a much higher dividends to shareholders this year.

Some insurers aren’t expecting good results from the provision.  WellPoint Inc, who has the highest enrollment, expects to take a $300 million hit this year due to the new provision and it forecasts a lower profit compared to 2010.  Morningstar analyst Matthew Coffina says the provision sounded worse than it really is when it first came out.  He believes it will be a mild negative for the health insurance industry.

The main goal behind this law is to make sure a good portion of the collected premiums a health insurance company collects goes towards health care and not just big salaries for executives or profit.  Beginning this year, health insurance companies have to spend at least 80% of the collected premiums on care-related costs for small-group and individual health insurance policies, and 85% for large group coverage. There may be an affect on major medical insurance quotes, but overall the impact should be minimal.