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Originally Posted by BigBen
Ace, you lost me on that one...
If everybody bought healthcare insurance, that does not necessarily mean that the average cost will be lower. Profits could easily increase, and the increased demand for insured services would cause the price to go up as well, negating any savings...
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If we have an insurance pool of 50 people who generate $1,000 in health care costs (keeping it as simple as possible). The average cost or premium for this insuance pool would be $20. If we added another 50 who generate $500 in healthcare costs, the new total is $1500, and the new premium for each in the pool would be $15. Insurance company profits are often based on investment income or managing the "float" more than it is on underwriting profit. If the insurance company has a bigger pool of money to manage, their profits will be higher, but that normally won't effect the underlying costs. So in this case if the insurer got advance premiums of $1500 rather tha $1000 and earned 5%, they would make $75 rather than $50. And, actually with a bigger pool of money the insurance company is less likely to want underwring profits and would use less risky investments to meet their profit objectives.
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Executives are forcing insurance plans down their employees throats? They are choosing the wrong plans? I don't buy that, as a blanket statement.
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Who is the customer? The employer is writing the check for the plan, the employer picking the plan, the employer defines the specs for the insurers being considered to bid on. So I would say the employer is the customer. Therefore the insurance company want to serve the employer much more so than the employee. I think this is true even when the employee is paying part or all the premium costs when it is being done through the employer. If the employer says cost is more important than choice - the employees won't get to make choices, if the employer picks a plan that has $1 million cap - the employees get a plan with a $1 million cap, ettc, etc.
I am not suggesting that the insurance company doesn't care about the employee. It just seems clear to me that there is a hirerarcy, and the employee isn't at the top.