A 25% margin is pretty good, and companies aren't hitting the limit currently.
The 7 publicly listed health insurers have ~2% profit margins, with the exception of UNH at 6%, but that is due to its healthcare provider business earning higher margins. The other insurers are almost all non profit (various BCBS affiliated insurers, Kaiser, Providence, etc).
Not sure what the relevance of that is. If anything, small profit margins just further incentivize trying to pay out less.
Here are the magic words in US Health Care: "What is the cash price?" It's usually less than you think and often worth avoiding the insurance company hassle. Then you can just get reimbursed with your FSA or HSA anyway.
FSAs are insane, conceptually. "Guess how much money you're spending in a year on healthcare! But beee caaareful: if you guess too high, YOU LOSE IT" I still used mine while I still had access to one, but it was grumpy-making and was usually almost more trouble than it was worth.
Unless you have an approved gym membership for which it can be used for ! With 30% discount !!
The 7 publicly listed health insurers have ~2% profit margins, with the exception of UNH at 6%, but that is due to its healthcare provider business earning higher margins. The other insurers are almost all non profit (various BCBS affiliated insurers, Kaiser, Providence, etc).
Not sure what the relevance of that is. If anything, small profit margins just further incentivize trying to pay out less.
You wrote they had 25% margins. And obviously a business with 2% profit margins is incentivized to spend less, if they didn’t, they would be out of business!
> An insurance company's only goal nowadays is to make as much money as possible How can that be true when their profits are capped on collected premiums? Look up the Medical Loss Ratio (MLR) rule to see what I'm referring to. If you wanted to squeeze money out of people, health insurance would be the least appealing industry to do that in since you're required to spend 80-85% of premiums on medical care.
Let me tell you about this little thing called Hollywood accounting
Hollywood accounting has nothing to do with legal accounting standards that are followed for publicly listed companies’ required SEC reports.
I don’t understand why any decision maker in any business in the USA chooses to offer their employees (and hence themselves) health FSAs at all, especially when the much superior in every way Fidelity HSA is available.
All the FSA money in your account is available immediately at the beginning of the year. Ironically that would make it a better choice for anyone with a lot of medical expenses on an HDHP if it wasn’t for the fact that FSAs are capped by law. As someone who does deal with enough medical stuff to clear the deductible (and sometimes the OOP max) on their normal health plan annually, it’s still much more convenient, aga…
FSAs are limited in scope if you have a HDHP by law. Only LPFSAs are allowed. HSAs don’t have that restriction other than you have to be on a HDHP to get it
It’s deeply frustrating that the $12 doesn’t go towards the deductible. I just saved the insurer a bunch of money!
You did nothing from their point of view except waive having them cover the claim, thusly leaving more money on their hands to be managed longer. Your "price discovery" isn't something they aren't aware of. On the contrary, their surveillance/clinical team have been crunching the numbers and making unilateral decisions on how the population is best guided to drugs based on their bottom line benefit to the insurer. Yo…
I found another really interesting one when my wife needed $30k in dental surgery. We hurried up and got the American marriage so that they could use my dental insurance only to find out that my plan has a LIFETIME LIMIT OF $1200. But what came to our rescue was good old collective bargaining! They call it a discount plan and basically the way it works is that for a small fee an insurance company will essentially draw you up a plan that counts you as a member but where the insurance company is explicitly not liable to pay for anything at all under any circumstances. The practical upshot is that you as a new Crap-Tier member of this insurance plan get the same negotiated rates as everyone else on this insurance plan, including the ones who pay through the nose. You still have to pay everything out of pocket, but to use this as an example "everything" went from $30k to $18k with the stroke of a pen and $50 in signup fees. This is one of the few things that an insurance company is doing that I think is actually great. The rates are exceedingly reasonable, the upside is amazing and because it's not technically insurance there's no pesky BS about open enrollment or you have to be married or you can only use it if your costs are above x once you've paid y and only if you've spent more than z this year but less than alpha your entire lifetime etc. Purely and simply walking into the office and going "Hey, there's ten thousand of us. Give us a fair rate and gain ten thousand customers or don't and don't."
All the FSA money in your account is available immediately at the beginning of the year. Ironically that would make it a better choice for anyone with a lot of medical expenses on an HDHP if it wasn’t for the fact that FSAs are capped by law. As someone who does deal with enough medical stuff to clear the deductible (and sometimes the OOP max) on their normal health plan annually, it’s still much more convenient, aga…
My HSA money is also available in the first pay period of the calendar year. It’s up to the employer to decide when they want to contribute it.
I think he is saying that if you want your FSA to be $5000 then it’s funded immediately but it gets taken out of your paycheck every pay period.
I don’t understand why any decision maker in any business in the USA chooses to offer their employees (and hence themselves) health FSAs at all, especially when the much superior in every way Fidelity HSA is available.
I've never seen the point of HSAs, either. The only benefit is the tax difference. There are (usually unknown, unstated upfront) plan fees that eat into that, and coupled with the higher deductibles and worse plan coverage, you're going to pay more out of pocket. It's never been clear to me if (higher OOP + plan fees) And it's a time suck.
HSAs are one of the best accounts and last until death.
"What is the cash price?" magically puts you back in the land of Classical Capitalism, where the service provider wants to keep you as a customer and knows their internal costs and you as a consumer of the service can evaluate their reputation for quality and cost vs other providers. It's adding 3rd parties like "insurance" (which only works as insurance in very limited catastrophic circumstances) and government plan…
Are you calling it the magical land because it doesn't exist? I doubt your doctors office can commit a cash price for the lab they sent you blood too. And try doing that at a hospital and see where it gets you
> I doubt your doctors office can commit a cash price for the lab they sent you blood too.
Why the hell not?
This is not a difficult problem to solve under the "Classical Capitalism" model.