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> Payer profit margins are relatively low and in total only constitute a small fraction of total healthcare spending. What? The government was forced to make i

> Payer profit margins are relatively low and in total only constitute a small fraction of total healthcare spending. What? The government was forced to make insurers cap their profits at 20%. Except now that means if they want to make more money, they just raise premiums and negotiated provider payments. Even easier when you're as vertically integrated as UHC.

nradov 3y ago
You appear to have confused payer profit margins with the 80 – 85% minimum medical loss ratio imposed by the Affordable Care Act (Obamacare). Medical insurance is a low margin business and industry profits have never been anywhere near 20%. https://www.cms.gov/marketplace/private-health-insurance/medical-loss-ratio https://www.cms.gov/marketplace/private-health-insurance/med... For the past quarter, the UnitedHealthcare business unit of UnitedHealth Group had a profit margin of 6.6%. https://www.sec.gov/ixviewer/ix.html?doc=/Archives/edgar/data/0000731766/000073176623000064/unh-20230930.htm#ibf155cb20fd34a4b9ad24f18a87bc9b8_22 https://www.sec.gov/ixviewer/ix.html?doc=/Archives/edgar/dat... The business is still highly competitive, and payers have limited ability to raise premiums due to push back from employers.
- TheOtherHobbes 3y ago
  You're confusing the insurance industry with the health industry. When you have the same companies owning hospital chains and insurance, they can easily pretend to be a low profit industry. The industry as a whole is insanely profitable. Revenue is $1.4 trillion. It posts profits of around $650bn. Which means on average it extracts around $2000 of profit from every single person in the US, with an average individual healthcare spend of more than $4000. The profit is in the ballpark of the entire US defence budget, at around $750bn. Healthcare is a huge boat anchor drag on the entire economy.
  - gruez 3y ago
    >The industry as a whole is insanely profitable. Revenue is $1.4 trillion. It posts profits of around $650bn. Which means on average it extracts around $2000 of profit from every single person in the US, with an average individual healthcare spend of more than $4000. Source for these numbers? 0.65 billion in profits on 1.4 billion in revenue is an insane margin

nradov 3y ago

You appear to have confused payer profit margins with the 80 – 85% minimum medical loss ratio imposed by the Affordable Care Act (Obamacare). Medical insurance is a low margin business and industry profits have never been anywhere near 20%. https://www.cms.gov/marketplace/private-health-insurance/medical-loss-ratio https://www.cms.gov/marketplace/private-health-insurance/med... For the past quarter, the UnitedHealthcare business unit of UnitedHealth Group had a profit margin of 6.6%. https://www.sec.gov/ixviewer/ix.html?doc=/Archives/edgar/data/0000731766/000073176623000064/unh-20230930.htm#ibf155cb20fd34a4b9ad24f18a87bc9b8_22 https://www.sec.gov/ixviewer/ix.html?doc=/Archives/edgar/dat... The business is still highly competitive, and payers have limited ability to raise premiums due to push back from employers.

TheOtherHobbes 3y ago
You're confusing the insurance industry with the health industry. When you have the same companies owning hospital chains and insurance, they can easily pretend to be a low profit industry. The industry as a whole is insanely profitable. Revenue is $1.4 trillion. It posts profits of around $650bn. Which means on average it extracts around $2000 of profit from every single person in the US, with an average individual healthcare spend of more than $4000. The profit is in the ballpark of the entire US defence budget, at around $750bn. Healthcare is a huge boat anchor drag on the entire economy.
- gruez 3y ago
  >The industry as a whole is insanely profitable. Revenue is $1.4 trillion. It posts profits of around $650bn. Which means on average it extracts around $2000 of profit from every single person in the US, with an average individual healthcare spend of more than $4000. Source for these numbers? 0.65 billion in profits on 1.4 billion in revenue is an insane margin