Vested interests have spent billions attacking Obamacare and the real reason for the attacks is a little know provision in Obamacare that limits the current profiteering by the healthcare insurance industry. The profits of the big ten insurance companies increased 250% between 2000 and 2009. They had a decade of record profits and extreme CEO salaries. The United Healthcare CEO made over a staggering $100 million a year.
The only reason why an entire industry could be reaping in such profits is uncompetitive activity in the market. If we had a pure competitive market in the insurance industry, the insurance companies could not be reaping in extreme profits because competitors could enter the market and offer lower cost policies on a lower profit margin. Profits are kept in check by competitors and a competitive market.
Prior to the mid-1980's most health insurance companies were run as non-profits. Blue Cross, Blue Shield was a non-profit healthcare provider. Then, 95% of your premium was spent on medical expense and 5% was used for administrative costs. Since health insurance companies began to convert to for-profit businesses, less and less of your premium payment was used on medical expenses and more and more was taken for profit.
United Healthcare for example, before Obamacare, paid out just 70% of your premium on medical expenses and kept 30% of your health insurance premium for profit. This is why the CEO of United Healthcare was so handsomely rewarded with $100 million a year in compensation. Moreover, the ever increasing profits made by the health insurance companies handsomely lined the pockets of their shareholders and Wall Street.
Obamacare attempts to limit outright profiteering by the Health insurance industry by mandating that 80% of your premium dollars be spent on medical expenses, leaving 20% for profit. If the Health insurers spend less than 80% of your premium on medical expenses, they must refund the excess. That would mean that United Healthcare, which only spent 70% of your premium on medical expenses, would have to refund you 10% of the premium they charged you. This is exactly what has happened. This year, because of this provision in Obamacare, the Health insurance industry has already had to refund $1.1 billion in premiums to consumers.
And the Healthcare industry and Wall Street in none too happy to have their lavish profits that they have been making off of us limited. Hence, vested interests have spent billions demonizing Obamacare. This is the true reason why they are so strongly attacking Obamacare and know it's repeal will only mean the continuation of high premiums and less coverage for you because they are for-profit companies and, as such, their goal is to try to maximize their profits for their shareholders. The only way to do that is squeezing you: raising your premiums and/or covering less and less of your medical costs.