Comment by yadaeno
3 days ago
Medical Loss Ratio (MLR) is capped at 85% in the US which means 85% of revenue must go to patients. This is roughly inline with other countries with universal healthcare (MLR ranges from 85-95%).
The fundamental problem is that we don’t have enough resources to take care of everyone. Insurance companies are faced with the impossible task of allocating resources and making care/nocare decisions.
I don’t get the “endless profiteering” angle against insurance companies. If anything it’s the providers who are screwing over patients by gaming insurance and taking more than is necessary from the shared insurance pool of money.
But when UnitedHealth requires medications to be purchased from Optum health (with whom they share a parent company), they can jack up the price of a drug and keep some of that 85% too.
They own the physicians, too.
https://www.statnews.com/2024/07/25/united-health-group-medi...
To whom they pay higher "medical loss":
https://www.statnews.com/2024/11/25/unitedhealth-higher-paym...
The more revenue an insurer brings in, the larger that 15% slice of the pie. The fact that they have a capped MLR is beside the point.
> If anything it’s the providers who are screwing over patients by gaming insurance and taking more than is necessary from the shared insurance pool of money.
If the 85% gets larger, so does the 15%. Both sides gain when the cost increases.
I’m not an expert but I’m wary of anyone who has a simplistic view of what seems to be a complex system. This, plus looking at the profit margin of UHC paints a more nuanced picture (net profit margin is not that high. the dollar amount is high because the scale of the company is big). (Not that I want to make money from denying people healthcare, no matter how much internal logic there is to it…)
But it does seem like there’s a serious prisoners dilemma type situation going on in American health care. It’s easy to point fingers at someone else.
The situation is also coupled with a toxic political environment where a Trump voter can simultaneously be against “Obamacare” and think that Trump is going to improve access to healthcare, and a Harris voter can be pro Obamacare and ignore regulatory capture by pharmaceutical companies- e.g., both sides so convinced they’re right and the other side is wrong they won’t be seen to agree on anything common sense.
so by increasing the cost of patient care, they can take out more profits.