Health insurance at its core is very simple. You put money in, you go to doctor, insurance pay doctor. But in the USA, the insurance denies everything they possibly can. Money put in doesn’t ever see a doctor or your health costs, it goes right to the stockholders…

So why doesn’t someone just make a non-profit health insurance company where there’s no stock, no executives, just public servants and aggressive price negotiation where your medical bills are actually paid with the money put in?

  • ArbitraryValue@sh.itjust.worksEnglish
    0·
    15 days ago

    Insurance company profits are already capped by law. I don’t think your ideal insurance company can possibly be that much better for the customer than the already-available options are.

    The companies must spend at least 80 cents of every dollar they collect in premiums from small businesses and individuals on health care, and 85 cents per dollar for large employers. The remaining 15 to 20 percent is all they are allowed under the Affordable Care Act to spend on administrative costs like overhead and marketing and to keep as profit. Any additional revenues are to be returned to consumers in the form of rebates.

    Note that the remaining 15 to 20 percent has to cover all the costs of actually running the company. It isn’t just profit.

    Furthermore, insurance companies do have to compete with each other on price. Denying a lot of claims helps them offer cheaper policies. Employers who provide insurance want the cheapest policy that their employees will tolerate and healthy people want the cheapest policy that they expect to protect them from sudden, catastrophic expenses. (I’m relatively young and healthy and I have never even seriously considered picking a policy other than the cheapest one whenever I had a choice.)

    In this context, if your business plan is to spend more money per customer than the existing insurance companies do, and your target market is people unhappy with their current insurance companies (these people probably have expensive problems) then you’re not going to do too well…