Most commercial insurance providers are for-profit companies. Policyholders’ monthly premiums fund commercial policies. Their premiums and coverage amounts are designed to create a profit for the insurance company. The health insurance industry continued an enormous growth trend as it experienced a significant increase in net earnings of $23.4 billion in 2018 compared to $16.1 billion in 2017. These numbers represent a profit margin of 3.3% in 2018 compared to 2.4% in 2017. Healthcare spending is projected to grow at an average rate of 5.5% per year between 2018 and 2027 1. President Obama stated “what I refuse to do is simply create a system where insurance companies have more customers on Uncle Sam’s dime, but still fail to meet their responsibilities.” 2 The most persuasive criticism was often directed toward for-profit insurers, who were accused of putting profits before patients. The framers of the Affordable Care Act (ACA) tried to limit insurers’ profits by requiring them to spend 80 to 85 percent of every premium dollar on patient care. Insurers fought intensely against this provision. Its inclusion in the ACA was hailed as a victory for consumers. But even 85% can seem like a gift when you consider that Medicare uses 98 percent of its funding for health care and only 2 percent for administration. Current estimates have physician practices spending an average of 3 hours a week interacting with health plans at a national cost of $23 billion to $31 billion a year. The administrative complexity created by multiple documentation requirements to varying billing, precertification, and credentialing forms takes time away from clinical care and significantly adds to the work challenges for billing specialists. In your search for information and discussion include the relationships between patient, provider, and billing specialist and how those relationships can be different with for-profit versus non-profit plans.
Analyze the rising costs of healthcare and assess appropriate profit margins.
Include the following aspects in the discussion:
Discuss whether health insurance should return to a non-profit status
Include the barriers of changing from a profit to non-profit status
Include the relationships between patient, provider, and billing specialist
Discuss what you believe is a reasonable percentage of premiums that should be dedicated to patient care
Include in your final thoughts if you believe that health insurance should, and could, return to a non-profit model
An Internet search on the “effect of healthcare insurance profits” will deliver many resources
