An idea to expand health care coverage or lower its costs

One idea on how to expand health care coverage in American or lower its costs would be to regulate health insurance profits such that insurers could earn up to 5% in pretax profit margins on health care premiums or fees before they would need to distribute any excess earnings in one of two ways.

Option 1, the health insurance companies could refund "excess profits" (based on premiums paid) to policyholders. This would lower the cost of healthcare to policyholders who collectively worked with their insurers to lower the cost of care.

Option 2,the health insurance carrier could "reserve" the excess profits for one year and use them to "subsidize" the premiums of individuals that could not secure insurance at standard insurance rates. On the second option, the insurer would actually increase their total profits by earning 5% on the premiums of individuals they would not normally have accepted for health insurance. But they would need to do so while maintaining competitive rates or they would lose the healthy subscribers/policyholders.

Under my proposal, health insurance carriers could split the excess pretax profits between both Options 1 & 2. In effect, I would be converting health insurance companies to a hybrid between the old mutual insurance companies collectively owned by their policyholders and the current stock insurance companies owned by their stockholders.

I would love comments on this idea as I think it preserves the competitive environment that our system depends on for its effectiveness while lowering health care costs or expanding health care coverage.