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0 pointsubernostrum9y ago0 comments

I work for a company which operates in the Medicare Advantage space.

A provision of the ACA sets a minimum medical loss ratio for us. In simpler terms: it puts a legal cap on our profit margin, by requiring a minimum percentage of the money we take in to be spent on benefits to our members (such as paying their claims).

That is almost certainly going to get repealed.

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Nrsolis9y ago· 2 in thread

In that scenario, are your interests served more by spending via medicare increasing or going down?

If your incentive is to maximize the absolute amount of actual profit you earn and the ONLY way you can do that is to push more money towards healthcare providers, then what do you think will actually occur?

Because once you have achieved that spend level on provider care, you're in the clear. The ONLY way for you to increase profit is to ensure that more procedures happen.

ubernostrumOP9y ago

We don't profit from paying out to providers; we're an insurer.

We profit when people are healthy.

Nrsolis9y ago

I think you misunderstand my question.

In a perfect world, you'd keep 100% of the premiums and never pay a cent to a healthcare provider because everyone is healthy, right?

In a terrible world, every single one of your insured has a chronic, long-term expensive to treat condition that requires you to pay tons of money to providers.

In the first/perfect case, premiums are zero, right? In the second/terrible/worst case, you're not making zero money because your (collected premiums - minimum payout) > 0.

See where I'm going with this? In a world with healthy people, there is little need for health insurance and spending trends towards zero. There isn't a need for an insurer. Your company can only exist in a world with sick people.

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