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I don’t understand how an insurance company can overcharge consumers. Isn’t their job to pay what pharmacies and hospitals charge? Do insurance companies get mo

I don’t understand how an insurance company can overcharge consumers. Isn’t their job to pay what pharmacies and hospitals charge? Do insurance companies get money if they approve the overcharged prices? If so how? I thought their revenue was the premiums which are fixed. Is the extra money because people are forced to pay everything after the little the insurance company pays?

jrflowers 2y ago
UnitedHealth is not an insurance company. They own an insurance company as well as OptumRx, a pharmacy benefit manager, which is described at the very top of this article.
- NickC25 2y ago
  Correct - they aren't an insurance company, they are a racketeering organization committing fraud under the guise of being a "healthcare" company that is vertically integrated with every facet of the healthcare supply chain. All this on top of being a for-profit corporation whose mission is quite literally to enrich shareholders, instead of helping patients navigate the healthcare system. RICO them.
- criddell 2y ago
  Can you explain how discount cards (like GoodRx) work?
  - jrflowers 2y ago
    No but I understand that Friskies and Lean Cuisine are not the same products despite both being owned by Nestle.
    - criddell 2y ago
      It's my understanding that the discount cards somehow work with pharmacy benefits managers (which the person I responded to mentioned). How and why they work has never made much sense to me.
  - deathanatos 2y ago
    I asked that when I first heard about them, and I came to the same conclusion the FTC did, basically: https://www.ftc.gov/news-events/news/press-releases/2023/02/ftc-enforcement-action-bar-goodrx-sharing-consumers-sensitive-health-info-advertising https://www.ftc.gov/news-events/news/press-releases/2023/02/... Their S-1 also stated, > In addition, HIPAA, which we believe does not currently apply to most of our business as currently operated (I should also say that I agree with the implicit message in your comment, too.)
  - pkaye 2y ago
    Basically the drug manufacturer charges the insurer high prices then kicks back some of that to cover your out of pocket costs so you are individually better off but the system is worse off. Most countries solve this by the government negotiating with the drug manufacturer for everyone and refusing to cover it until they get a reasonable price. https://kffhealthnews.org/news/article/drug-companies-copay-assistance-program-charity-or-bribe/ https://kffhealthnews.org/news/article/drug-companies-copay-...
    - criddell 2y ago
      That’s the coupon scheme which is a bit different. The discount programs I’m talking about make deals with pharmacy benefits managers which are middlemen between pharmacies and drug companies. Part of the agreement between the pharmacy and PBMs is that the pharmacy must honor discounts with companies like GoodRx even though it means they could be losing money on the sale. I’d like to learn more about these PBMs and how they have so much power and what their purpose is.
      - pkaye 2y ago
        Thanks for the clarification. From this link looks like another middleman that negotiates discounts with drug makers for insurers then marks it up. I'm curious who makes more profit. The PBM or the drug manufacturer. https://www.investopedia.com/articles/markets/070215/what-pharmacy-benefit-management-industry.asp https://www.investopedia.com/articles/markets/070215/what-ph...
- billjings 2y ago
  They also are the largest employer of doctors in the United States. They've essentially constructed their own single-payer health care provider, but instead of being paid for by tax dollars it's a publicly traded company whose primary goal is to increase shareholder value.
- yalogin 2y ago
  Looks like we need regulation to prevent a company to own the whole stack like this. Leads to exploitation of consumers as we see here. Of course there is no will to do this in our politicians when they get bought for pittance
hirsin 2y ago
They're not just the insurance company - they are also the pharmacy manager who sells the drugs to the patient. So there wasn't really anyone to negotiate with - they pick the price they want to sell the drug for and then how much of it they'll cover.
deleted 2y ago
[deleted]
xenophonf 2y ago
That's the magic of vertical integration! https://youtu.be/5rw4kNHNZyk https://youtu.be/5rw4kNHNZyk

jrflowers 2y ago

UnitedHealth is not an insurance company. They own an insurance company as well as OptumRx, a pharmacy benefit manager, which is described at the very top of this article.

NickC25 2y ago
Correct - they aren't an insurance company, they are a racketeering organization committing fraud under the guise of being a "healthcare" company that is vertically integrated with every facet of the healthcare supply chain. All this on top of being a for-profit corporation whose mission is quite literally to enrich shareholders, instead of helping patients navigate the healthcare system. RICO them.
criddell 2y ago
Can you explain how discount cards (like GoodRx) work?
- jrflowers 2y ago
  No but I understand that Friskies and Lean Cuisine are not the same products despite both being owned by Nestle.
  - criddell 2y ago
    It's my understanding that the discount cards somehow work with pharmacy benefits managers (which the person I responded to mentioned). How and why they work has never made much sense to me.
- deathanatos 2y ago
  I asked that when I first heard about them, and I came to the same conclusion the FTC did, basically: https://www.ftc.gov/news-events/news/press-releases/2023/02/ftc-enforcement-action-bar-goodrx-sharing-consumers-sensitive-health-info-advertising https://www.ftc.gov/news-events/news/press-releases/2023/02/... Their S-1 also stated, > In addition, HIPAA, which we believe does not currently apply to most of our business as currently operated (I should also say that I agree with the implicit message in your comment, too.)
- pkaye 2y ago
  Basically the drug manufacturer charges the insurer high prices then kicks back some of that to cover your out of pocket costs so you are individually better off but the system is worse off. Most countries solve this by the government negotiating with the drug manufacturer for everyone and refusing to cover it until they get a reasonable price. https://kffhealthnews.org/news/article/drug-companies-copay-assistance-program-charity-or-bribe/ https://kffhealthnews.org/news/article/drug-companies-copay-...
  - criddell 2y ago
    That’s the coupon scheme which is a bit different. The discount programs I’m talking about make deals with pharmacy benefits managers which are middlemen between pharmacies and drug companies. Part of the agreement between the pharmacy and PBMs is that the pharmacy must honor discounts with companies like GoodRx even though it means they could be losing money on the sale. I’d like to learn more about these PBMs and how they have so much power and what their purpose is.
    - pkaye 2y ago
      Thanks for the clarification. From this link looks like another middleman that negotiates discounts with drug makers for insurers then marks it up. I'm curious who makes more profit. The PBM or the drug manufacturer. https://www.investopedia.com/articles/markets/070215/what-pharmacy-benefit-management-industry.asp https://www.investopedia.com/articles/markets/070215/what-ph...
billjings 2y ago
They also are the largest employer of doctors in the United States. They've essentially constructed their own single-payer health care provider, but instead of being paid for by tax dollars it's a publicly traded company whose primary goal is to increase shareholder value.
yalogin 2y ago
Looks like we need regulation to prevent a company to own the whole stack like this. Leads to exploitation of consumers as we see here. Of course there is no will to do this in our politicians when they get bought for pittance

hirsin 2y ago

They're not just the insurance company - they are also the pharmacy manager who sells the drugs to the patient. So there wasn't really anyone to negotiate with - they pick the price they want to sell the drug for and then how much of it they'll cover.

deleted 2y ago

[deleted]

xenophonf 2y ago

That's the magic of vertical integration! https://youtu.be/5rw4kNHNZyk https://youtu.be/5rw4kNHNZyk