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> People think that the insurer will try to keep costs down, but in fact, if prices go up they can charge more for insurance This isn't really how they make mo

by nojito 3y ago

> People think that the insurer will try to keep costs down, but in fact, if prices go up they can charge more for insurance This isn't really how they make money. Insurers make their profits by limiting the amount that they have to pay out. The reason why owning both the care provider and the insurer is wrong is that it makes denying or "moving care" to less costly locations easier.

nradov 3y ago
Nope, that's not how it works anymore. First, insurers (payers) no longer even provide much insurance. The majority of their business is now managing networks and processing claims on behalf of self-insured employers. Second, payer profit margins are now capped by the 80% minimum medical loss ratio introduced by the Affordable Care Act (Obamacare). Payers actually make less profit when they deny care. When coverage for certain services is denied it's usually because your employer designed your plan with strict limits.
- nojito 3y ago
  MA plans complicate this. There's a reason why everyone but United is getting out of the MA space, because united is growing despite medicare cutting payments.
Uvix 3y ago
Insurers used to make their money that way. But now that US health care insurers are required to use at least 80% of premiums to pay health care costs, they've lost the incentive to keep prices low. Increasing their profit now requires paying out more in claims.
- nojito 3y ago
  Not really true. United's long play is with medicare advantage. They plan to add an insane 450k new members by 2024. https://www.forbes.com/sites/brucejapsen/2023/11/28/unitedhealth-group-to-eclipse-400-billion-in-revenue-next-year/?sh=39afb61956a2 https://www.forbes.com/sites/brucejapsen/2023/11/28/unitedhe... https://www.healthcarefinancenews.com/news/unitedhealths-medicare-advantage-growth-below-expectations https://www.healthcarefinancenews.com/news/unitedhealths-med... This is a great example why United was the sole insurer who was able to absorb the Medicare cuts while everyone else is shedding their MA exposure.

by nojito 3y ago

nradov 3y ago

Nope, that's not how it works anymore. First, insurers (payers) no longer even provide much insurance. The majority of their business is now managing networks and processing claims on behalf of self-insured employers. Second, payer profit margins are now capped by the 80% minimum medical loss ratio introduced by the Affordable Care Act (Obamacare). Payers actually make less profit when they deny care. When coverage for certain services is denied it's usually because your employer designed your plan with strict limits.

nojito 3y ago
MA plans complicate this. There's a reason why everyone but United is getting out of the MA space, because united is growing despite medicare cutting payments.

Uvix 3y ago

Insurers used to make their money that way. But now that US health care insurers are required to use at least 80% of premiums to pay health care costs, they've lost the incentive to keep prices low. Increasing their profit now requires paying out more in claims.

nojito 3y ago
Not really true. United's long play is with medicare advantage. They plan to add an insane 450k new members by 2024. https://www.forbes.com/sites/brucejapsen/2023/11/28/unitedhealth-group-to-eclipse-400-billion-in-revenue-next-year/?sh=39afb61956a2 https://www.forbes.com/sites/brucejapsen/2023/11/28/unitedhe... https://www.healthcarefinancenews.com/news/unitedhealths-medicare-advantage-growth-below-expectations https://www.healthcarefinancenews.com/news/unitedhealths-med... This is a great example why United was the sole insurer who was able to absorb the Medicare cuts while everyone else is shedding their MA exposure.