7 ms·

At one point in 2020 a majority of insured Americans treated for COVID (>80%) had the majority of their COVID-related treatment waived by the insurer. However,

At one point in 2020 a majority of insured Americans treated for COVID (>80%) had the majority of their COVID-related treatment waived by the insurer. However, most insurers have been terminating these waivers since January. Also, to any non-Americans its always important to put this in the context that "waiving" here means you're still paying thousands per month (between employer and individual) in premiums and likely hundreds in various flavors of co-jargons anytime you step the foot in the door of a care provider even for "covered" care. Insurers always like to portray just providing the service you pay more for than you would in most of the rest of the world as altruism on their part. The major insurance companies providing these waivers (Anthem, UnitedHealth, etc.) all saw order $B profit increases over the pandemic.

lotsofpulp 5y ago
Anthem profit margin is down: https://www.macrotrends.net/stocks/charts/ANTM/anthem/profit-margins https://www.macrotrends.net/stocks/charts/ANTM/anthem/profit... UHC margins also do not indicate profiteering: https://www.macrotrends.net/stocks/charts/UNH/unitedhealth-group/profit-margins https://www.macrotrends.net/stocks/charts/UNH/unitedhealth-g... Same with CVS/Humana/Cigna: https://www.macrotrends.net/stocks/charts/CVS/cvs-health/profit-margins https://www.macrotrends.net/stocks/charts/CVS/cvs-health/pro... https://www.macrotrends.net/stocks/charts/HUM/humana/profit-margins https://www.macrotrends.net/stocks/charts/HUM/humana/profit-... https://www.macrotrends.net/stocks/charts/CI/cigna/profit-margins https://www.macrotrends.net/stocks/charts/CI/cigna/profit-ma... It is always interesting to me when people claim insurance companies earn a ton of profit when their profit margins are always in the 5% or lower range. How much smaller should their margins be? Even retail businesses like Walmart need a couple percent of profit margin to survive.
- deleted 5y ago
  [deleted]
- aschampion 5y ago
  I didn't say margin, I said profit, and you can click a tab over on any of those pages and see overall gross profit is up in 2020. What kind of rational baseline is assuming that increasing margin is the default neutral state? How is that a stable dynamic for any system?
  - lotsofpulp 5y ago
    I have never heard of a business that reaches $x of profit and then switches to pricing everything so that they get $0 of profit. And why would I be concerned with gross margin? If insurance companies were profiting more than normal from COVID, then it would show up in the profit margin figure.
    - 93po 5y ago
      > I have never heard of a business that reaches $x of profit and then switches to pricing everything so that they get $0 of profit. Isn't this the business model of tons of huge companies? Amazon famously ran at very deliberately low profits for years. Uber and Lyft have margins so low they're losing tons of money in an attempt to get market share.
      - plorkyeran 5y ago
        Eschewing profits now to fuel growth with the intention of making large profits later is the exact opposite of that.
      - lotsofpulp 5y ago
        >Isn't this the business model of tons of huge companies? Amazon famously ran at very deliberately low profits for years. No. Operating at low profit margins is not the same as reaching $x of profit and then selling everything at cost. >Uber and Lyft have margins so low they're losing tons of money in an attempt to get market share. These do not seem relevant, as most businesses, by and large, year after year, are not giving away products or services to try and gain marketshare.
- sixQuarks 5y ago
  Insurance companies have a vested interest in making sure that healthcare costs keep going up. It’s a counterintuitive notion because you would think they want healthcare cost to go down. The reason they want high cost it’s because they’ll be making that small margin on the higher revenue
  - lotsofpulp 5y ago
    So does every business. But just like every other business, they have competitors too, so they cannot expect their profits to rise simply because they keep increasing their cost of goods sold. Either way, that is not relevant to the claim that was being contested, which was “insurance companies are profiting extra from covid than they normally would”.
    - rsfern 5y ago
      Interesting point. I read the original point as contesting the idea that insurers are going to have to eat a loss. In the end I think both perspectives are insightful: insurers aren’t in the red for 2020, but they’re also profiting from COVID less than they “normally would”
  - maest 5y ago
    Incidentally, this is also why tobacco manufacturers don't really mind high cigarette taxes: it puts a higher floor on the cost of a pack of cigarettes, which means the overall profit is larger.
    - lotsofpulp 5y ago
      Only if the higher profit from higher sales price makes up for the possible decrease in sales from higher price.
    - gruez 5y ago
      Why does it set a higher floor? The tax goes to the government, the tobacco company doesn't get to keep it.
- asimpletune 5y ago
  Generally speaking the adage is “profit is an opinion, cash flow is a fact”
  - lotsofpulp 5y ago
    That adage is more useful when looking at individual companies, or maybe new businesses. For long established, highly regulated operations, I would expect consistent profit margin figures across pretty much all companies in the business to represent a pretty accurate view of the situation, and to show if they are earning extra profit due to COVID.
- bko 5y ago
  That's my big problem with the healthcare debate. People think that its because of "profit", but if you look at the profit margins of all participants, they're all reasonable. Even if you could shift that profit over to consumer surplus, you're still looking at crazy high health care spending. Something deeper is wrong with America's healthcare system. I think the third-party payer system and onerous regulations distort the market in costly ways. Just as the simplest example, if you want to open up a health care provider you need a "certificate of need" in most states. This means a board of current health care providers in the are determine whether there is a real "need" in the neighborhood for a competitor. > Certificate of Need (CON) laws are state regulatory mechanisms for establishing or expanding health care facilities and services in a given area. In a state with a CON program, a state health planning agency must approve major capital expenditures for certain health care facilities. CON programs aim to control health care costs by restricting duplicative services and determining whether new capital expenditures meet a community need. Ah yeah, lets reduce costs by restricting "duplicative services" https://www.ncsl.org/research/health/con-certificate-of-need-state-laws.aspx https://www.ncsl.org/research/health/con-certificate-of-need...
  - retrac 5y ago
    A great deal of service provision in many countries' systems is private. Even here in Canada, "socialist" medicine often boils down to a private clinic billing the public insurer. Though the major hospitals are usually owned and operated by non-profit corporations, or the local government.
  - 542354234235 5y ago
    The US wastes $150,000,000,000 a year (the most per capita in the world) in pushing paperwork directly because of our “competing” individual insurance provider model [1]. The US spends the most overall per capita by far on healthcare, while also not even covering all residents. Despite having poor health outcomes and lower life expectancy, the US is the leader in expensive diagnostic imaging and prescription drugs [2]. Its almost like the “competing” private insurance model creates large amounts of wasted effort in trying to extract profit, as well as perverse incentives to push high profit interventions while ignoring actual health outcomes. > In countries where hospitals receive global, lump-sum budgets, garnering operating funds requires little administrative work. Per-patient billing, on the other hand, requires additional clerical and management staff and special information technology systems. In countries where there are multiple payers, as in the United States, billing is even more complex, since each hospital must negotiate payment rates separately with each payer and conform with a variety of requirements and billing procedures. > Higher spending appeared to be largely driven by greater use of medical technology and higher health care prices, rather than more frequent doctor visits or hospital admissions…Despite spending more on health care, Americans had poor health outcomes, including shorter life expectancy and greater prevalence of chronic conditions… Even though the U.S. is the only country without a publicly financed universal health system, it still spends more public dollars on health care than all but two of the other countries… [1] https://www.commonwealthfund.org/publications/journal-article/2014/sep/comparison-hospital-administrative-costs-eight-nations-us https://www.commonwealthfund.org/publications/journal-articl... [2] https://www.commonwealthfund.org/publications/issue-briefs/2015/oct/us-health-care-global-perspective https://www.commonwealthfund.org/publications/issue-briefs/2...
paulcole 5y ago
> any non-Americans its always important to put this in the context that "waiving" here means you're still paying thousands per month (between employer and individual) in premiums and likely hundreds in various flavors of co-jargons anytime you step the foot in the door of a care provider even for "covered" care. Where did you come up with “thousands” and “likely hundreds”? Just so the non-Americans reading this have a data point, I’m a single person with Type 1 diabetes who pays $200 a month for my insurance premium (my employer also pays $200 a month). I also pay about $110 a month out of pocket for insulin, $1500ish a year for my glucose monitor, and pay about $250 total a year in various co-pays to see a primary care physician, endocrinologist, and ophthalmologist (maybe 6-7 visits total. This is on a “Gold” plan (the best offered by my employer).
- eob 5y ago
  Your employer is paying the difference for you. As part of their health plan setup, they select what percentage of the plan to cover for their employees and their dependents.
  - deleted 5y ago
    [deleted]
  - paulcole 5y ago
    No. I oversee our HR/benefits. Company pays 50% of premium, employee covers other 50%.
- aschampion 5y ago
  The average gold plan in the US is $575 premium per person per month. For the average household that would be thousands. The average monthly healthcare cost across all "levels" is about $975 per person.
  - paulcole 5y ago
    So just to be clear this was pretty exaggerated right? > "waiving" here means you're still paying thousands per month (between employer and individual) in premiums I get it that American healthcare sucks but let’s at least try to be accurate about how much it sucks.
uzakov 5y ago
> Also, to any non-Americans its always important to put this in the context that "waiving" here means you're still paying thousands per month Also important to remember the "take home" pay in the USA vs other countries. For many software engineers from the USA it would be significantly more than in other countries, for example due to the fact that there are a number of opportunities to earn good 6 figure salaries
- nicoburns 5y ago
  My understanding is that it's mainly only software development that has such a disparity though. Doesn't help much if you're not a software dev (or you lose you job due to ill health).
  - uzakov 5y ago
    Yeah, I think another field(though I could be wrong on this one) that pays much better in the USA VS other countries is finance. Outside of these field the situation is very different
- glenngillen 5y ago
  Most people in the US aren’t tech workers though. And the pay disparity for many other roles, especially in the middle-low ends of the spectrum, are not very competitive compared to other countries with nationalised healthcare.
  - uzakov 5y ago
    Absolutely, no dispute there. I thought it might be worth pointing that out, since Ycombinator has a lot of IT visitors.
- Joeri 5y ago
  Do also take into account that the median wage in the US is only around 35K per year. Clearly most americans are not in line for a 6 figure salary, nor will they ever be.

lotsofpulp 5y ago

Anthem profit margin is down: https://www.macrotrends.net/stocks/charts/ANTM/anthem/profit-margins https://www.macrotrends.net/stocks/charts/ANTM/anthem/profit... UHC margins also do not indicate profiteering: https://www.macrotrends.net/stocks/charts/UNH/unitedhealth-group/profit-margins https://www.macrotrends.net/stocks/charts/UNH/unitedhealth-g... Same with CVS/Humana/Cigna: https://www.macrotrends.net/stocks/charts/CVS/cvs-health/profit-margins https://www.macrotrends.net/stocks/charts/CVS/cvs-health/pro... https://www.macrotrends.net/stocks/charts/HUM/humana/profit-margins https://www.macrotrends.net/stocks/charts/HUM/humana/profit-... https://www.macrotrends.net/stocks/charts/CI/cigna/profit-margins https://www.macrotrends.net/stocks/charts/CI/cigna/profit-ma... It is always interesting to me when people claim insurance companies earn a ton of profit when their profit margins are always in the 5% or lower range. How much smaller should their margins be? Even retail businesses like Walmart need a couple percent of profit margin to survive.

deleted 5y ago
[deleted]
aschampion 5y ago
I didn't say margin, I said profit, and you can click a tab over on any of those pages and see overall gross profit is up in 2020. What kind of rational baseline is assuming that increasing margin is the default neutral state? How is that a stable dynamic for any system?
- lotsofpulp 5y ago
  I have never heard of a business that reaches $x of profit and then switches to pricing everything so that they get $0 of profit. And why would I be concerned with gross margin? If insurance companies were profiting more than normal from COVID, then it would show up in the profit margin figure.
  - 93po 5y ago
    > I have never heard of a business that reaches $x of profit and then switches to pricing everything so that they get $0 of profit. Isn't this the business model of tons of huge companies? Amazon famously ran at very deliberately low profits for years. Uber and Lyft have margins so low they're losing tons of money in an attempt to get market share.
    - plorkyeran 5y ago
      Eschewing profits now to fuel growth with the intention of making large profits later is the exact opposite of that.
    - lotsofpulp 5y ago
      >Isn't this the business model of tons of huge companies? Amazon famously ran at very deliberately low profits for years. No. Operating at low profit margins is not the same as reaching $x of profit and then selling everything at cost. >Uber and Lyft have margins so low they're losing tons of money in an attempt to get market share. These do not seem relevant, as most businesses, by and large, year after year, are not giving away products or services to try and gain marketshare.
sixQuarks 5y ago
Insurance companies have a vested interest in making sure that healthcare costs keep going up. It’s a counterintuitive notion because you would think they want healthcare cost to go down. The reason they want high cost it’s because they’ll be making that small margin on the higher revenue
- lotsofpulp 5y ago
  So does every business. But just like every other business, they have competitors too, so they cannot expect their profits to rise simply because they keep increasing their cost of goods sold. Either way, that is not relevant to the claim that was being contested, which was “insurance companies are profiting extra from covid than they normally would”.
  - rsfern 5y ago
    Interesting point. I read the original point as contesting the idea that insurers are going to have to eat a loss. In the end I think both perspectives are insightful: insurers aren’t in the red for 2020, but they’re also profiting from COVID less than they “normally would”
- maest 5y ago
  Incidentally, this is also why tobacco manufacturers don't really mind high cigarette taxes: it puts a higher floor on the cost of a pack of cigarettes, which means the overall profit is larger.
  - lotsofpulp 5y ago
    Only if the higher profit from higher sales price makes up for the possible decrease in sales from higher price.
  - gruez 5y ago
    Why does it set a higher floor? The tax goes to the government, the tobacco company doesn't get to keep it.
asimpletune 5y ago
Generally speaking the adage is “profit is an opinion, cash flow is a fact”
- lotsofpulp 5y ago
  That adage is more useful when looking at individual companies, or maybe new businesses. For long established, highly regulated operations, I would expect consistent profit margin figures across pretty much all companies in the business to represent a pretty accurate view of the situation, and to show if they are earning extra profit due to COVID.
bko 5y ago
That's my big problem with the healthcare debate. People think that its because of "profit", but if you look at the profit margins of all participants, they're all reasonable. Even if you could shift that profit over to consumer surplus, you're still looking at crazy high health care spending. Something deeper is wrong with America's healthcare system. I think the third-party payer system and onerous regulations distort the market in costly ways. Just as the simplest example, if you want to open up a health care provider you need a "certificate of need" in most states. This means a board of current health care providers in the are determine whether there is a real "need" in the neighborhood for a competitor. > Certificate of Need (CON) laws are state regulatory mechanisms for establishing or expanding health care facilities and services in a given area. In a state with a CON program, a state health planning agency must approve major capital expenditures for certain health care facilities. CON programs aim to control health care costs by restricting duplicative services and determining whether new capital expenditures meet a community need. Ah yeah, lets reduce costs by restricting "duplicative services" https://www.ncsl.org/research/health/con-certificate-of-need-state-laws.aspx https://www.ncsl.org/research/health/con-certificate-of-need...
- retrac 5y ago
  A great deal of service provision in many countries' systems is private. Even here in Canada, "socialist" medicine often boils down to a private clinic billing the public insurer. Though the major hospitals are usually owned and operated by non-profit corporations, or the local government.
- 542354234235 5y ago
  The US wastes $150,000,000,000 a year (the most per capita in the world) in pushing paperwork directly because of our “competing” individual insurance provider model [1]. The US spends the most overall per capita by far on healthcare, while also not even covering all residents. Despite having poor health outcomes and lower life expectancy, the US is the leader in expensive diagnostic imaging and prescription drugs [2]. Its almost like the “competing” private insurance model creates large amounts of wasted effort in trying to extract profit, as well as perverse incentives to push high profit interventions while ignoring actual health outcomes. > In countries where hospitals receive global, lump-sum budgets, garnering operating funds requires little administrative work. Per-patient billing, on the other hand, requires additional clerical and management staff and special information technology systems. In countries where there are multiple payers, as in the United States, billing is even more complex, since each hospital must negotiate payment rates separately with each payer and conform with a variety of requirements and billing procedures. > Higher spending appeared to be largely driven by greater use of medical technology and higher health care prices, rather than more frequent doctor visits or hospital admissions…Despite spending more on health care, Americans had poor health outcomes, including shorter life expectancy and greater prevalence of chronic conditions… Even though the U.S. is the only country without a publicly financed universal health system, it still spends more public dollars on health care than all but two of the other countries… [1] https://www.commonwealthfund.org/publications/journal-article/2014/sep/comparison-hospital-administrative-costs-eight-nations-us https://www.commonwealthfund.org/publications/journal-articl... [2] https://www.commonwealthfund.org/publications/issue-briefs/2015/oct/us-health-care-global-perspective https://www.commonwealthfund.org/publications/issue-briefs/2...

paulcole 5y ago

> any non-Americans its always important to put this in the context that "waiving" here means you're still paying thousands per month (between employer and individual) in premiums and likely hundreds in various flavors of co-jargons anytime you step the foot in the door of a care provider even for "covered" care. Where did you come up with “thousands” and “likely hundreds”? Just so the non-Americans reading this have a data point, I’m a single person with Type 1 diabetes who pays $200 a month for my insurance premium (my employer also pays $200 a month). I also pay about $110 a month out of pocket for insulin, $1500ish a year for my glucose monitor, and pay about $250 total a year in various co-pays to see a primary care physician, endocrinologist, and ophthalmologist (maybe 6-7 visits total. This is on a “Gold” plan (the best offered by my employer).

eob 5y ago
Your employer is paying the difference for you. As part of their health plan setup, they select what percentage of the plan to cover for their employees and their dependents.
- deleted 5y ago
  [deleted]
- paulcole 5y ago
  No. I oversee our HR/benefits. Company pays 50% of premium, employee covers other 50%.
aschampion 5y ago
The average gold plan in the US is $575 premium per person per month. For the average household that would be thousands. The average monthly healthcare cost across all "levels" is about $975 per person.
- paulcole 5y ago
  So just to be clear this was pretty exaggerated right? > "waiving" here means you're still paying thousands per month (between employer and individual) in premiums I get it that American healthcare sucks but let’s at least try to be accurate about how much it sucks.

uzakov 5y ago

> Also, to any non-Americans its always important to put this in the context that "waiving" here means you're still paying thousands per month Also important to remember the "take home" pay in the USA vs other countries. For many software engineers from the USA it would be significantly more than in other countries, for example due to the fact that there are a number of opportunities to earn good 6 figure salaries

nicoburns 5y ago
My understanding is that it's mainly only software development that has such a disparity though. Doesn't help much if you're not a software dev (or you lose you job due to ill health).
- uzakov 5y ago
  Yeah, I think another field(though I could be wrong on this one) that pays much better in the USA VS other countries is finance. Outside of these field the situation is very different
glenngillen 5y ago
Most people in the US aren’t tech workers though. And the pay disparity for many other roles, especially in the middle-low ends of the spectrum, are not very competitive compared to other countries with nationalised healthcare.
- uzakov 5y ago
  Absolutely, no dispute there. I thought it might be worth pointing that out, since Ycombinator has a lot of IT visitors.
Joeri 5y ago
Do also take into account that the median wage in the US is only around 35K per year. Clearly most americans are not in line for a 6 figure salary, nor will they ever be.