Which prices are those? When I go to the doctor I get an insurance statement that says something like:
Billed: $800
Paid by insurance: $200
You owe: $0
Billed: $800
Paid by insurance: $200
You owe: $0
They pay $200 for a service you think costs $800 and WILL cost you $800 if you buy it yourself.
You buy insurance based on the FULL cost of the procedure. If you could access $200 yourself you wouldn;t need insurance. You can self insure at these prices.
For the benefit of running the "self insurance" plan they are taking the difference between $200 and $800
Anyone else have a company and know what usual profit margins are? Your local pharmacy is lucky to pull off 35%.
This is 400% markup that a "retail" person pays over the insurance company.
It's not hard to make money when you buy at $200 and sell at $500-600-700 through an insurance policy.
This is how companies like AIG (anybody remember them) buy things like ski hills for their executives.
See www.stowe.com
Americas are building up the next generation of their royalty.
Companies with a mission in "health care" that mae 400% margins and buy ski hills for their executuves to use on "retreats".
Yup, that makes total sense, to a lobbyist, lawyer or other enemy of the public and democracy.
Crony capitalism, not true capitalism and market economy that people think of in the USA.
The insurance companies got a major windfall with Obamacare. That lobbying really worked out.
He could has just as easily allowed Medicare/Caid to negotiate prices and take over mre of the health care.
That wouldn;t give jobs to people that Obama really cares about. North east Liberal lawyers.
If it gets $300 of premiums and only spends $200 on medical care, it has to send the extra $50 back to the customers (larger programs have to send back $65).
More here:
http://kff.org/health-reform/perspective/beyond-rebates-how-...
The fact health insurance companies invest in ski hills is very telling about lack of focus on their real business.
Either their real biz makes so much money that they can spend it like drunken sailors or they don;t care about the primary mission of the company and are just buying perks they can use themselves.
Either way you split it, it's still a total mess and not what shareholders or customers (patients) are expecting in an healthcare insurance company.