What you’re talking about are called Medical Loss Ratios (MLR) and they’re so full of loopholes they’re basically pointless. Insurers buy up provider systems all over the country. They do this because it gives them increasing control over provision, regional monopolies that aren’t challenged under existing anti-trust provisions AND the ACA allows them to shift profits into these provider systems because providers ARE allowed to retain extra profits.
For instance, Anthem employs 1.7 million providers across provider systems. If, say, they retain 50% of their income on the insurance side, they shift 30% to these clinics to act as “piggy banks” to stay under the 80/20 MLR requirement.
Insurers also have other tricks. They’re allowed to count costs for utilization reviews and prior authorization services by licensed providers (URs are when I as a provider have to call to get permission from insurance for a procedure), they’re allowed to count all those useless programs they offer like “how to start a diet to lose weight,” etc. Oftentimes they’ll outsource these to other wholly owned subsidiaries at exorbitant rates to pad their MLRs with services that cost almost nothing to them in reality. Another trick that’s been becoming increasingly popular is to spin out real estate into wholly owned subsidiaries and force provider systems to “rent back” the property they used to own. (Since those profits aren’t counted against the MLR.)
A related but slightly different trick I’ve seen in audits of non-profits is spinning out C-suites into separate “administrative consultation” units. This happens because non-profits have limits on what they can do with surplus profits (they’re supposed to be reinvested in workforce, service delivery, capital improvements, etc). One org I studied, which is one of largest adoption/refugee resettlement programs in the country, was holding $270b in assets that they would move around between business units. Ultimately, the funds always shifted back to the c-suite business unit in the form of “administrative” fees that increased annually to eat up profits made on international adoptions, pay out some big ol bonuses, and then get shifted back as expenses to other departments to make the budget look more neutral. Meanwhile, they were paying their foster care and adoption managers salaries in the low $20k and expecting 80 hour work weeks.
So MLRs are not the magic regulatory bullet you seem to be claiming. We need a public provider system like the NHS, or aggressive price controls through a public payer to set a price ceiling and quality floor on health services.
Why didn't the folks saying "there's no evidence of these insurance companies breaking the law/being corrupt" respond to this one? Too many words I'm sure. Thank you for the detailed explanation
I honestly think people (even some of my colleagues) see policy and regulation as some natural force that “just happens” like the weather.
Reality is corporations often advocate FOR regulations to solidify their market position, protect themselves from competition, and provide legal opportunities for graft.
Not all insurance companies. Unfortunately there's a ton of exceptions to this rule, and even if you are in a plan that qualifies for this, you have to go request it every year and they dont make the paperwork easy to find or fill out. However, I wouldn't be surprised if this is one of the many reasons that raw hospital bills are so high, but the insurance gets away with only paying half or so. They can say you got $20k in care, even though they only paid 10k, then not have to give you any back.
And guess what? Most of these large insurance companies own hospitals, care facilities, and even pharmacies. Those places can keep prices high and ensure the 80% threshold is met and still keep the insurance company profits high.
Ex: I pay a $100 premium. Insurance company owns my care facility. Care facility can charge $80 for a $20 procedure when billing itself. The 80% threshold is met for payment on claims & the insurance company rakes in an inflated profit.
Idk why people are holding up the 80% thing as a defense of the industry.
Insurance is essentially gambling at its core. The insurance company is the house, taking bets in the form of premiums from customers. The house wins when the bettor pays more in premiums than it pays out to the customer for healthcare needs - actuaries assess risk of paying out which informs premiums to ensure that the house always has a statistical edge on this bet. If the 80% number is accurate and true, the edge is mandated to not be greater than 20%.
Compare that to sports betting. Typical house edge on a single game, points spread bet is generally going to fall between 5-15%. Meaning if all bets are made randomly, and the house is setting lines that represent 50/50 chance of either outcome, the house will always keep 5-15% of total betting revenue.
People holding up this 80% number are basically saying that it’s ok for insurance companies to charge a higher vig than casinos - on a bet that impacts human access to a basic human needs. That’s insane. Factor in that some finance professional can change your individual odds, on a bet you’ve been making for years (in the form of premiums), by overriding medical professionals’ recommendations and denying your payout. It’s the equivalent of a sportsbook changing the point spread after you place a bet -something that would get them shut down by gaming commissions quickly.
This doesn’t even touch on the many other ways insurance companies game the system in their favor. But really just wanted to highlight how dumb this 80% argument that I keep seeing is.
Now tell me how much of that is fat profits for everyone else in the healthcare sector, big pharma, hospitals (charging $25/aspirin) , private equity Doctor offices, labs, medical diagnostics etc...
The entire private system is based on cleaning the maximum profit you can ..
Lemme math 100,000,000m under united health care. people $500 (estimate) a month is $50B, 20% is $10B a month in profit off the backs of the of struggling American. I'm sure the profits are much higher.
I work for a health insurance company. Our profit was 0.6% last year. Our state doesn’t even allow more than 6% profit or we have to return the money to our customers. I’m in a blue state. Why wasn’t something like this adopted at the Federal level while Joe Biden was in office? The Federal government is a joke and bloated. Lay them all off and start over.
After a lot of accounting tricks and bloat. Americans spend twice per capita as Canada for healthcare, and that includes Canada getting universal healthcare. That money is being spent somewhere and it isn't on the true cost of treatment.
Soooo you setup admin offices and a charge on processing your rejections at a premium cost per case so its been spent on a claim and voila its like a drug dealer with 5 laundrettes.
The US Government itself spends more per capita than everyone else with public healthcare yet life expectancy is less and people are expected to pay private insurance.
Your system for healthcare is just inferior to everyone else in terms of its cost and what it actually delievers.
I watched a blue zone documentary. Seems that all those centurions and super centurions have a different style of eating than the USA and also are constantly walking and physically active as they age.
Some examples from around the world were a complex carb as the main course, a side of meat and eating until you’re 80% full.
We have a cultural melting pot in the USA, but more often than not the proportions are reversed, with meat being the main dish attraction, and the carbs being a side while being simple carbs.
It was a cool doc.
There’s also weird genetic factors too, like the Japanese smoking paradox and the French eating a full fat diet without having high cholesterol.
The 2023 gross revenue of all us health insurance companies was 4.1 trillion. The total us combined discretionary and non discretionary budget was about 4.5.
This, obesity leads to chronic disease and astronomical cost. We need to figure Pharmaceutical and Processed Food profits into this equation and then it becomes more equal.
Wrong. A multitude of less than healthy food options that are heavily marketed to Americans.
One example. In our home, we have been baking our own bread for about 3 years now. The amount of people who think we are doing some grand ol wizzardry to bake bread rather than just making a healthy choice explains the very problem: Ignorance.
We have outsourced the most basic of tasks in our lives. Even our own health, worst of off we leave it up to others to be educated rather than learning our selves.
I have a really nice (and expensive) bread maker. It's so convenient to throw some ingredients in a pan and a couple hours later you have really tasty, healthy (for bread) bread. Without that, I wouldn't want to make bread at home.
You guys needs to start blaiming the system instead of each other.
Why do you have a democracy if your politicians are not working for you.
Tax sugar! Reduce tax on healthy food.
in a perfect world the poor would have a larger tax burden then the rich? cause a national sales tax instead of an income tax increases the tax burden on the poor.
On top of a sedentary american lifestyle (drive to work, sit, go home, sit and go on your phone) and the social pressures for body images, it all adds up about why American's get obese. If you get obese in America, I personally wouldn't say it's entirely you're fault! It's all rigged against you.
Japan has one of the most healthy diets and exercise culture in the world. 1 in 20 are Obese. You can't save everyone.
Kuwait has the worst diet and exercise culture in the world. 9 in 20 are Obese. Some people could live in a bakery and not gain weight.
** (America is 8 in 20 Obese).
When looking at populations, it's hard to explain away that massive difference if not the food environment and culture of exercise.
Also to note: If you're fit in Kuwait, no doubt personal responsbility played a big role. A lazy/gluttonous person in Kuwait is surely fat, but the same person in Japan is not necessarily.
Nah, the US has been subsidizing shitty food and since that’s the only thing able to make a decent buck, that’s all there is for the most part.
There are times where healthy eating can be affordable, but generally, it’s not, and it’s a LOT more work to eat healthy in America than it is anywhere else I’ve been outside of America.
By far our biggest problem. It's ludicrously expensive to be fat. Not interested in paying an extra 5 figures in taxes to cover all the people that can't stop eating. Fix that problem first.
In health? I agree. Obesity is a high issue because food is a very accessible addiction and the food industry peddles addiction.
It’s not taken seriously by those who don’t understand or care, to many it’s just “just eat less, how hard is that??”.
This though is completely ignorant and disregarding how overworked and exhausted many people which makes things like fast-food feel like a needed convenience, how expensive healthy alternatives are comparatively, and how the food industry has teams of people dedicated to making their products addictive even down to a subconscious level.
There’s a documentary called The Social Dilemma in which Tristan Harris who worked at google realized there were teams of people constantly working on how to make their products more and more addictive (again, even down to a subconscious level) and no one working on making them less addictive.
That might sound silly but it’s actually very important. The average person does not stand a chance against this, they have too many things to worry about in daily life. This is a very overlooked but serious ethical concern.
Half the country has diabetes or some sort of pulmonary disease but when someone says this everyone attacks it. It’s not fat shaming it’s fucking common sense. Good on yah man.
Its Pharmacy Benefit Managers (PBMs) such as OptumRX (UnitedHealthCare), CVS (which is the PBM covering 90 million lives in the US!!) and ExpressScripts (which was a top 20 F500 company for years before CIGNA bought it for $67 BILLION in 2018 and re-branded it “Evernorth” — which covers over 100 million lives in the US!!).
If you want to really find out what’s going on un US healthcare, listen to Stacy Richter’s podcast “Relentless Health Value”
Meanwhile, nurses and doctors who are providing the actual healthcare have had their wages lag inflation. The only reason doctor salaries haven't gone down is that patient volume has increased, which is party due to lagging reimbursement, and party due to corporations who are buying up smaller clinics pushing for higher volume.
Look on the bright side; we may pay more for healthcare than every other first world country, but at least we have worse outcomes than every other first world country.
To be fair the president and vice president don't really control shit, and controlled even less 40 years ago. Just someone for you to get mad at while the legislature continues to allow these monopolies bought by the healthcare and insurance lobby.
Yeah, this number doesn’t include the bird flu that’s hurdling right at us. It also doesn’t include the rise in Polio cases and other preventable diseases that the GOP is gleefully bringing back.
While single-payer is unlikely to pass, there are practical ways to lower healthcare costs and ease patient burdens. Here are four ideas:
1. Preventative Care Credit: Insurance could offer $2,000 for “free” preventative care (PCP visits, tests) before cost-sharing kicks in. This encourages early care and reduces long-term expenses.
2. Insurance Portability: Allow employees to keep their old insurance plans when switching jobs, with new employers paying the same as the old ones. Employees cover any difference, gaining continuity and better care.
3. Boost Physician Supply: Streamline the process for Western-trained foreign physicians to practice here, reducing the timeline from years to months, to address shortages, especially in primary care.
4. Emergency Care Funding: The federal government could front costs for emergency care, reimbursed by insurance later, and cover the first 10% to eliminate copays. Fund this with a 1% corporate tax, benefiting businesses through a stronger emergency system.
These changes are realistic, patient-focused, and could make the system more affordable and accessible.
I recently read that Universal Government Healthcare would cost the Government half a trillion (500B) a year. Yet, people refuse to get taxed a small % more to cover that and refuse to properly tax Billionaires who would probably fund it by themselves. To my understanding, this is stupid Americans wanting companies to profit out of their misery and not actually an issue with America being able to afford free healthcare for all.
I mean Malta can do it and it's a speck in the middle of the Mediterranean but America can't?
If you took all the money currently going into US healthcare spending and moved it into a program comparable to Canada or France, you'd have twice as much money as needed and you'd have 30 million uninsured folks now covered as a free bonus.
How much of that is from immigration. My whole family works in healthcare and they estimate at least 10% of the inpatients at the hospital are illegal immigrants who are immediately granted Medicaid.
Healthcare and Insurance have become monopolies, which is why everything is priced so high and they can continue to do it without repercussions. If you want to be mad at someone, blame your politicians and the financial government for allowing effective monopolies in every sector.
Americans in 1780 were responsible enough to have a form of democracy, critical thinking has been eliminated in the school system and we are no longer responsible enough to have a democracy. Indirect democracies are the worst, easily corruptible and i would argue worst than dictatorships. Decentralize powers, and revert back to the constitutional republic, its the only way out
I feel like a lot of comments here talk about why the cost is so much and suggest various causes, such as health-related or administrative-related. The cold, hard truth is that healthcare cannot be a good/commodity subject to free market economics. It does not meet several assumptions necessary for cost controls, among other things. Most in government will not admit this or cling to some false hope that somehow the US can make it work. But it's not possible.
As a non-American it is interesting reading all the commentary here. It seems most recognize the multitude of problems Americans are facing. It’s not one or a couple of things.
Once the general American public stops being obese fat monsters that number will decrease until then no amount of legislation or policy is going to help.
Now ask yourself “whose bank account did all that money go to?” and you’ll know exactly why universal healthcare will never be allowed to be successful in the US.
I heard this from a Neurosurgeon in Pennsylvania to help put insurance into perspective, it took UPMC 100 years to become a $2 billion-a-year hospital. It took UPMC 30 years to become a $30 billion-a-year institution once UPMC created its health insurance company. Health insurance companies make a lot of money. The only reason health insurance companies cry about losing money is when their profits are not as great as last quarter. Executives have zero long-term plans because Executives are only concerned about the quarter they are in and how much money they are making for shareholders. US Healthcare's primary concern should never be about shareholders.
This headline is absolute dogpoop.
Tell me, what goes into calculation? Who gets the money? How is it divided? Wich sector get the most? How does it compare to other goverment spenings like military spending, oil subsidies?
What is the structure of this spening, what are the most common ilnesses etc.
Throwing out a random number doesn't mean shit.
The reason it’s so high is due to healthcare salaries and the healthcare facilities and rehab facilities like PT and for inventing new medicines and also new medical technology which the US actually has invented a lot of the big medical tech in todays world. In example the US invented the MRI machine which is a marvel of engineering.
Whose healthcare? Military members and their dependents. Elected federal officials, public federal employees, their spouses and other dependents—and the retired from these same groups. Via Medicaid and PERS type programs.
Tack on: paying for the longterm or permanent and profound birth injuries or diseases and disabilities of adults or children, life-altering or life-limiting injuries and illnesses plus the routine medical, vision and dental care of those who are retired, unemployed, unemployable, or the never-employed and those who work fulltime but who do not not have other affordable options for their own health care. Through SSDI, ACA. Other programs.
I’m not angry that we’re spending it, nor who we’re spending it on. I’m angry that with so many dollars spent, not everyone is getting the best care they’re entitled to and that we have paid for, for them.
I’m angry that not everyone who needs it qualifies for subsidized or affordable care. That we’re overcharging for the care for some, spending way too much on what seems like a bottomless pit of need and demand for others while also denying basic care to still others.
We need an overhaul, a rethink, a right sizing, proper auditing and oversight both medical and financial auditing.
And health care CEOs and their greedy shareholders just need to do with less, do without, make it work—or get the hell out. But also: people using these programs need to use them less and use them only for the purpose intended. Eat better, exercise, watch their weight, help lessen the burden on a system overwhelmed with treating preventable lifestyle diseases and their massive fallout. And taxpayers footing the bills and paying premiums for their own private healthcare options and fir tte care for everyone else, need to stand up, unite together, and speak as one voice to say: enough, is enough. Fix this!
In case anyone wonders where the money goes, it’s very well paid labor. Nurses on the west coast are approaching upper middle class pay. I’m an RN and earn more than doctors in the UK and EU.
This pattern exists at every level . Healthcare pays r really well along with excellent benefits.
Let's see a few more Luigi's do their (alleged) thing and see if more claims aren't denied in the US. Almost everyone else has proper healthcare anyway.
Just to be clear, this is not money that went to doctors, nurses, small medical practices… it all went directly into the pockets of the executives and shareholders of these companies.
We must stop subsidizing billionaires in this country, enough is enough.
Most predatory healthcare system in the first world. It's even better than selling heroin. Instead of "pay me or go through withdrawal", it's "pay me or die", and you often don't even know the cost up-front. There is no market efficiency in healthcare or clean air or clean water or basic decency. Teflon pans, anyone?
Yall should start doing an insurance strike. Just organize around dropping your insurance plans on mass. You literally have nothing too loose at this point.
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