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Health insurance profit margins typically run around 1-3%. 2018 was 3.3% and that was an exceptionally good year for them. https://naic.org/documents/topic_ins

Health insurance profit margins typically run around 1-3%. 2018 was 3.3% and that was an exceptionally good year for them. https://naic.org/documents/topic_insurance_industry_snapshots_2018_health_ins_ind_report.pdf https://naic.org/documents/topic_insurance_industry_snapshot...

minikites 6y ago
Why are you only considering profit? The entirety of their revenue is parasitic.
toss1 6y ago
That jut tells me that the health insurance companies are very inefficient Their profit is not the measure of what they extract Their total top-line income is the proper measure of what the HC Insurance companies extract from the system -- PLUS the entire income of the set of companies that optimize billing so that providers can get fully paid -- PLUS the entire income of the industry of seminars & trade shows teaching providers how to optimize their billing, etc., etc., etc. That entire industry of HC payments is parasitic - it adds no value, and extracts money. Just pay the providers, and have patients show up at the door to get care, and let the doctors be the gatekeepers, not some unqualified insurance bureaucrats. And yes, there would be many, many thousands of HC insurance workers who would need to find new employment. This is a good thing.
- squaresmile 6y ago
  If one considers everything spent on health insurance companies a waste, which I disagree with, one should look at the loss ratio to see how much the insurance is extracting. In the linked report, the loss ratio is 84% so the insurance companies extracted ~16%. The comment by orwin says that 22% is spent on bureaucracy in France public healthcare. 16% doesn't look that bad. I'm not saying US healthcare doesn't have problems and there aren't some weird practices but if you can't measure or identify the problems correctly, you are not going to fix it.
- bluecalm 6y ago
  With single payer you will have unqualified bureaucrats as well. You need to decide who you pay for what and how much. That problem won't go away with single payer. I know because I live in a single payer country and it's a shot show. You may manage to make it more efficient maybe but you know, it's not like government run bureaucracy has great record of achieving that.
orwin 6y ago
I don't know about the US, but let's see France: For tax-funded public healthcare, 78% of the money they are making via taxation is used to reimburse patients. That mean 22% is used to pay for the bureaucracy. Its is growing according to the numbers i have, despite all the shiny new tech they could have. You would imagine private healthcare insurance compny overhead is lower, right? or at most at 25% for a 3% profit? Right. So Swisslife (i think this is the european private healthcare that have the biggest network, at least for glasses): 31% of what you're paying will get in their pocket to pay for bureaucracy and profit. Either they have huge margins, either they have huge costs and are more inefficient than public healthcare. whatever the reason is, the number is way too high.

minikites 6y ago

Why are you only considering profit? The entirety of their revenue is parasitic.

toss1 6y ago

That jut tells me that the health insurance companies are very inefficient Their profit is not the measure of what they extract Their total top-line income is the proper measure of what the HC Insurance companies extract from the system -- PLUS the entire income of the set of companies that optimize billing so that providers can get fully paid -- PLUS the entire income of the industry of seminars & trade shows teaching providers how to optimize their billing, etc., etc., etc. That entire industry of HC payments is parasitic - it adds no value, and extracts money. Just pay the providers, and have patients show up at the door to get care, and let the doctors be the gatekeepers, not some unqualified insurance bureaucrats. And yes, there would be many, many thousands of HC insurance workers who would need to find new employment. This is a good thing.

squaresmile 6y ago
If one considers everything spent on health insurance companies a waste, which I disagree with, one should look at the loss ratio to see how much the insurance is extracting. In the linked report, the loss ratio is 84% so the insurance companies extracted ~16%. The comment by orwin says that 22% is spent on bureaucracy in France public healthcare. 16% doesn't look that bad. I'm not saying US healthcare doesn't have problems and there aren't some weird practices but if you can't measure or identify the problems correctly, you are not going to fix it.
bluecalm 6y ago
With single payer you will have unqualified bureaucrats as well. You need to decide who you pay for what and how much. That problem won't go away with single payer. I know because I live in a single payer country and it's a shot show. You may manage to make it more efficient maybe but you know, it's not like government run bureaucracy has great record of achieving that.

orwin 6y ago

I don't know about the US, but let's see France: For tax-funded public healthcare, 78% of the money they are making via taxation is used to reimburse patients. That mean 22% is used to pay for the bureaucracy. Its is growing according to the numbers i have, despite all the shiny new tech they could have. You would imagine private healthcare insurance compny overhead is lower, right? or at most at 25% for a 3% profit? Right. So Swisslife (i think this is the european private healthcare that have the biggest network, at least for glasses): 31% of what you're paying will get in their pocket to pay for bureaucracy and profit. Either they have huge margins, either they have huge costs and are more inefficient than public healthcare. whatever the reason is, the number is way too high.