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View Diary: Post exposes an inconvenient truth - insurers will still cherry pick (168 comments)

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  • (11+ / 0-)

    30% profit margins are why Private Health Insurance costs are so expensive.

    The sole purpose of a for profit Corporation is to make the share holders money. Period. End of story.

    Private Insurance Corporations are not inherently evil - they are doing what they are supposed to do - maximize profits.

    Health Care should not be about profits - it should be about PEOPLE.

    By the way calchala - nice try.  Have a Great Day!

    "But such is the irresistable nature of truth, that all it asks, and all it wants is the liberty of appearing." -Thomas Paine

    by Tommymac on Sat Oct 03, 2009 at 11:07:17 PM PDT

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    •  Profit margins for insurance companies are much (0+ / 0-)

      lower than 30%. However, it's not related to the issue brought up here. Medicare indeed underpays doctors by 5-10%, it's well known.

      •  Medical loss ratios are 75 to 80% (3+ / 0-)
        Recommended by:
        FG, Cassandra Waites, Tommymac

        That means that 75 to 80 cents of every premium dollar goes to actual medical treatment. Wall Street considers this "a loss", hence the name. The other 20-25% aren't all profit. They go towards marketing, CEO salaries, investor dividends, etc.  

      •  What establishes your true baseline (0+ / 0-)

        If you start from the position that the cost for any given procedure is determined by the average of what insured people's companies are charged then you can say that Medicare underpays doctors and then assume the difference is in some way a surtax on insured customers. On the other hand you could equally start from the position that all doctors are on average over compensated and that Medicare and private insurance alike are being overcharged.

        It is not a natural law that says that all doctors must be compensated in such a way that they can afford Jaguars that everything is just perfectly regulated via the Invisible Hand. Instead pricing of anything is influenced by a variety of competing pricing powers that tug them up and down.  The notion that any end price is the 'natural' one being more a piece of mystic EMH theory used to justify the conduct of whoever had the most influence over the pricing.

        And yes profit margins for private insurance average about 3%. But that doesn't include executive compensation or the compensation for all the managers and workers who spend their days finding ways to deny claims. From the perspective of the customer those services add no value and so might as well be considered profits to the company.

        •  Primary care doct0rs usually don't make huge (0+ / 0-)

          amounts of money. Some specialists do and it does contribute significantly to the cost of healthcare. Unless public option becomes a huge player in the marketplace and will essentially determine reimbursement rates, doctors will refuse to participate in it if the reimbursement rates will be much lower compared to private insurance.
          The cost factors that you are citing for insurance companies are real and are not necessary. However, they don't amount to anything close to 30%. Maybe 10%.

    •  I dispute your characterization. (5+ / 0-)
      Recommended by:
      hester, buckhorn okie, Bonzo1, Tommymac, johnva

      I say that they are, in fact, evil, insofar as I believe it is a heinous evil to actually profit off of the sickness and suffering of other human beings, even if it is a legal thing to do.

      Health insurers are scum and should be exterminated.

      Nothing is true; everything is permitted.

      by jumpjet on Sat Oct 03, 2009 at 11:41:04 PM PDT

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