How much do insurance companies spend on actual patient care?

Discussion in 'Healthcare/Insurance/Govt Healthcare' started by Chris, Dec 20, 2009.

  1. Chris
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    Chris Gold Member

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    The accounting firm PricewaterhouseCoopers issued a report this year stating that the country's seven largest commercial health insurers use only 83.1 percent of premiums received to pay for medical costs for large group policies. That compares with the 95 percent that went for health care services in 1993 and the 97.9 percent that Medicare spends on patient care, the report said.

    Those large companies include Aetna, UnitedHealth Group, Cigna, WellPoint, owner of Blue Cross Blue Shield, and Coventry, Humana and Health Net. All seven operate in Florida.

    Insurers may have to hike percentage spent on care
     
  2. JW Frogen
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    JW Frogen Gold Member

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    This is sadly why the current legislation, the plan Obama never had the time to manage, the plan the Congress is mutating into political connivance rather than health care efficiency will not contain cost.

    You have to have a non-profit alternative to private insurance in order to make private insurance serve the customer rather than solely their share holders.

    What I fear is the Congress has come up with a government subsidy plan for private insurers made cost effective by cuts in Medicare.

    And so says all of me.
     
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    Last edited: Dec 20, 2009
  3. LuckyDan
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    LuckyDan Sublime

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    Hello, Chris

    Any figures comparing who denies more claims between private insurers and Medicare? Or who pays more litigation costs?
     
  4. LuckyDan
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    LuckyDan Sublime

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    Shareholders in any insurance company don't see dime one until claims are paid and payroll is met. They are always the last in line, no matter what the business.
     
  5. The Rabbi
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    The Rabbi Diamond Member

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    And the relevance of this is??
     
  6. chanel
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    chanel Silver Member

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    I was just going to ask this question. The senate bill mandates that 80% be spent on patient care. I am not that business-savvy, but was curious what other service industries consider reasonable operating costs and profit margins. Is 20% reasonable?
     
  7. The Rabbi
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    The Rabbi Diamond Member

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    Twenty percent is not the profit margin. I think most health insurers would be thrilled to be making as much as software companies.

    I wonder about this knee jerk reaction I see here. Whenever companies are making profits it is assumed to be "at the expense" of someone, like the consumer. So profit making is a negative.
    In the real world profits are what allow higher salaries, better benefits, more research and development, and a better economy. All things one would imagine would be desirable.
     
  8. chanel
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    chanel Silver Member

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    Is the 20% operating cost comparable to Medicare and Medicaid? Dumb question I guess.

    Many health insurers have gone "non-profit". I wonder if they all will now. And I also wonder how that will affect tax revenue. Aren't non-profits tax exempt?
     
  9. The Rabbi
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    The Rabbi Diamond Member

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    I dont know. The evidence appears to be that having "non profit" insurers doesnt cut costs for insurance.
     
  10. Big Black Dog
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    Big Black Dog Gold Member Supporting Member

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    Just a thought... Everybody is bitching about all of the proffits that insurance companies make and are using this for one of the many reasons this Health Care Reform bullshit is going to be rammed down our throats by a Congress that doesn't care anything about what the majority of Americans want. Now my question is this. Who will be bitching about all of the proffits our government makes when they eventually take over and run the insurance companies out of business? Although there is no "Public Option" stated in the plan that the Dems will pass in the middle of the night like theives who can't do something in public during regular daylight hours, you know before it's all over with there will be one. No matter what the Constitution says... Will people then bitch about the government's large proffits because you know they will be rationing care and not paying certain claims too. Just like a salesman who gets his foot in the door, the government is going to continue to take over your life and the liberals will love it - at least until the 2010 and 2012 elections.
     
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