https://www.americanprogress.org/issues/healthcare/reports/2...
But the regular uninsured consumer sure gets screwed.
I think this is why there are now self-pay “codes” you can give a pharmacy to get a significant discount off retail price. Sometimes less than your co-pay, but of course then it doesn’t count toward your deductible.
I wish they would simply ban these pricing gimmicks as part of a price transparency law.
There should be one price and one price only the manufacturer can charge in the USA per dose of an FDA approved medicine, with no ability to do price differentiation, period. No more negotiating, no more kickbacks. Insurance should have to show you the actual price they paid, and no other. And then you pay the patient responsibility of the bill based on your standard policy formula.
The same pricing transparency should be applied to labs and procedures where it should be illegal for a given facility to charge two different patients two different prices for the same product or service.
https://www.fiercehealthcare.com/payer/industry-voices-why-i...
All the insurers have profit margins in the 3% to 5% range. Where is all this extra profit that the middlemen are making?
Even if the PBM division is earning more profit than others, it's simply offsetting losses elsewhere.
Consider CVS Health which owns Aetna (an insurer), Caremark (a PBM) and CVS (a pharmacy). Aetna is required to spend 80% on premiums whereas Caremark and CVS face no such constraints on their profit margins.
There's a reason why there's so much M&A in this space while consumers are simultaneously facing higher premiums.
United health at 6%
https://finance.yahoo.com/quote/UNH/key-statistics/
Similarly, Anthem at 4.22%, CVS at 3%, Cigna at 3.38%, Humana at 5.58%, Molina at 4.57%, Centene at 2.12%.
The reason there’s so much M&A in this space is because there’s no margins, so it’s either go big and win in economies of scale, or go home and go out of business. And people face higher premiums because more people are getting more access to healthcare. There’s no lifetime benefit maximums or pre existing condition exclusions anymore. And the highest premiums are capped at 3x the lowest premiums.
Net income is a poor metric here. It includes acquisition costs (and interest paid on debts for said acquisitions).
https://www.macrotrends.net/stocks/charts/UNH/unitedhealth-g...
I don’t see a lot of juice to squeeze in insurance companies in general.
The 5% that you quote is after those acquisitions (and taxes) and is not a true indicator of profit.
But very funny when someone comes in and wants to pay cash. While that would be SO much easier than dealing with the agency - you got to charge them 4x so some politician and HN posters can go on about how much money the govt "saves".
I just wish prices (cash paid) had to be posted publicly.
So we went sliding scale uninsured, and despite being in the top end of the scale, I ended up paying about 1/3 less than I would have through insurance. I probably still ended up subsidizing some kid who needed fillings worse than I did, which was the only silver lining in that whole stupid affair.
For instance, with the manufacturers of insulin, none of them are American and they offer to sell the insulin to everyone at the same price.
The problem is that the large insurance companies use just three middle-men drug buyers called Pharmacy Benefits Managers (PBM) who DEMAND growing discounts every year from drug manufacturers, so the drug manufactures have to raise the prices to the US market every year to keep making a profit.
Novo Nordisk is willing to sell insulin much cheaper, but the drug buyers demand about a 75% discount off of the wholesale cost or they'll make the product not covered by the insurance companies they represent. To compensate, they raise the wholesale price in the US so after the forced discounts, they still make the same amount of money.
The people who suffer are the ones who don't have insurance.
The solution, at least in the case of insulin, isn't cheaper prices from the manufacturer, it's for the US to pass a law that prevents insurance companies from dropping a product based on the refusal to discount the product if it's under a certain price-per-month.
This article seems to cover the finger-pointing between the manufacturers and PBM's and insurane companies very well: https://www.healthline.com/diabetesmine/pharmacy-benefit-man...?