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Insurance companies are require to put a certain % of the premiums towards actual healthcare. In other words administrative fees (read profit) is capped as a %
by pmalynin 5y ago
Insurance companies are require to put a certain % of the premiums towards actual healthcare. In other words administrative fees (read profit) is capped as a % of the premium. The higher the premium the higher the profit.
- huitzitziltzin 5y agoAdministrative fees =/= “profit”. That is wrong. Administrative fees include profit, but also salaries, IT expenses, whatever other costs it takes to actually run an insurer.
- s1artibartfast 5y agoIs the rest correct? That is to say, there is an incentive for higher overall insurance spend, because it allows for higher admin fees (including profit)
- SomewhatLikely 5y agoThese ridiculous markups existed before those caps imposed by the ACA.
- SkittyDog 5y agoThe ACA did not impose those caps, in the first place. It merely standardized them. State insurance laws have mandated the same kind of caps for decades... I believe they date back to around WWII, but I don't know for certain.