If we want a health care system in which insurance companies are responsible for medical payments instead of the government - and apparently we do - then we should expect revenues to increase whenever more people are insured. Likewise gross profits should increase. That was kind of the point.
Stock prices are a poor indicator of anything relevant to a patient. They reflect sentiments like financial uncertainty and confidence in future operations, both of which naturally improved after the ACA was passed. So what?
As for profit margins, in 2016:
United Healthcare reported $7b in net income on $184b in revenue, a margin of <4%. This is not excessive.
Anthem, the second largest insurer, reported $2.5b in net income on $85b in revenue, a margin of <3%.
Aetna, the third largest insurer, reported $2.3b in net income on $63b in revenue, still <4%.
Humana, the fourth largest insurer, reported $600m in net income on $54b in revenue. That’s barely 1%.
Cigna, the fifth largest insurer, reported $1.9b in net income on $40b in revenue. That’s <5%.
No, they aren’t. Because unlike an oligopoly, health insurance revenues are basically capped by law. If less than 80% of premiums are used for medical expenses, then they are required to partly refund the premiums. This is unlike pretty much any other industry.
Not true. With the CSR in place, the insurance company lowers out of pocket costs for low income families.
They aren’t being used to improve profit margins. They are used to lower out of pocket costs. Which means more people insured and lower premiums in general.
As expected, the loss of CSR is being shifted directly to the consumer. 2018 premiums are projected to increase by 20% to offset ending of CSR. Federal premium subsidies will also increase, and the government will end up paying more than it saves.
