How Much Revenue Does The Insurance Company Take From The Health Care Industry In The Form Of Profit ?
....no doubt Health Insurance giants have been very profitable for a long time now....
Profit itself is not a bad thing, however GREED IS.
Now what if all of that profit went to Hospitals and doctors instead ?
WHY do we need Insurance companies ?
It seems to be they are the parasite on the entire industry ! Sucking all of the revenue out of Health Care in the form of profit.
I'm all for free enterprise, free market capitalism,...but not when it's at the expense of our country.
Forgive me, I just don't see why we NEED a "middleman" to health care in the first place....
Tags: Care, Company, Does, From, Health, Industry, Insurance, Much, Revenue, Take
August 28th, 2009 at 4:31 pm
Good question. I know large HMOs like Aetna and Blue Cross/Blue Shield enjoy over 50% profit margins, but that’s only because I worked in the industry and I have first-hand knowledge. I can’t provide a link for this because… let’s face it… those companies don’t want to advertise this fact.
However, I can document the fact that 1/3 of every healthcare dollar (31 percent) is spent on administrative costs for HMOs. I also know that insurance companies deny claims with such regularity that many hospitals have to hire 1 billing specialist per patient room. Duke hospital is an example – they have 900 billing specialists to handle all the denied claims.
August 28th, 2009 at 9:33 pm
If you don’t see the need for a middleman, I applaud your personal responsibility. The only alternative to having a middle man is having enough in a personal savings account to dip into when personal health issues arise.
And for the record, the pharmacutical companies make more than the insurance companies, they also have a stronger lobby than the insurance company. But both are crooked. We shouldn’t fool ourselves the government would still be a middleman in a system of NHC, and for the pharmacutical lobby, nothing would please them more.
August 29th, 2009 at 2:57 am
Because of the way health insurance works, insurers haven’t been paying much of a penalty for failing to contain costs. Insurers typically keep around 15 to 25 percent of the premiums they collect to cover administrative and marketing costs, plus profit (the exact percentage varies according to state regulations, if any). The rest goes to pay for health care for customers.
In 2006, the nation’s six biggest private health insurers collectively earned almost $11 billion in profits.
August 29th, 2009 at 3:46 am
So when the doctor charges you 5000 and the ins company says no sorry you are only getting the negotiated rate of 700 we should just allow the doctor to charge the full 5000?
I think our solutions are going to be pretty similar.
I’m for a HSA account for everyone(this will encourage shopping around), and gov regulation over prices that can be charged for procedures and medical equipment.
Why we need the government to become an insurance company defies common sense. Its an extremely complex and wasteful way to solve the issues.
August 29th, 2009 at 6:53 am
Which govt agency is in charge of determining when profit becomes greed?
It seems libs always want others to not be greedy when it is OK for libs to be.
Ever look at a lib’s tax forms and see how many evil tax loopholes they use?
August 29th, 2009 at 9:16 am
This country spends $2.26 trillion on health care.
The insurance industry made $80 billion (claimed as “obscene” by those demanding this health care reform). That an approximately 4% profit margin. Is that obscene to you?
August 29th, 2009 at 9:42 am
Administration overhead charged for private insurance companies are between 15 and 20 percent. A majority of that is profit. Actual administrative costs are usually under 5%.
August 29th, 2009 at 3:43 pm
Billions, which is why they do not want health care reform to succeed.
They want confusion, fear and neighbor against neighbor to occur at any cost.
August 29th, 2009 at 4:23 pm
enough to make people on wall street happy
August 29th, 2009 at 5:05 pm
Why do we need insurance companies?
You need insurance companies because the costs if you actually get sick with cancer or similar illness is in the hundreds of thousands of dollars. That is far more money than you would spend in premiums and deduct ables for that same condition with insurance.
The point of insurance is to pool the risk and the cost of medical care across a large population. The reason costs have been skyrocketing isn’t their greed (they take the same market share as always – but the market has grown so the profits follow).
Its because we are so unhealthy! Obesity is single Handel destroying health care in America. The cost of obesity related illness is in the hundreds of billions of dollars and continuing to climb.
Doctors would LOVE LOVE LOVE to take cash from patients instead of insurance companies. You usually get a discount for cash payments. But the fact is that it is too expensive for most people to pay out of pocket.