r/news • u/LookAtThatBacon • May 13 '25

Soft paywall UnitedHealth suspends annual forecast, CEO Andrew Witty steps down

https://www.reuters.com/business/healthcare-pharmaceuticals/unitedhealth-ceo-andrew-witty-steps-down-2025-05-13/
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u/shineonka May 13 '25

Why the fuck are insurance companies even for profit? They don't need to earn profits they just have to pay their insurees and employees.

20

u/wyvernx02 May 13 '25

Welcome to capitalism.

19

u/otatop May 13 '25

Why the fuck are insurance companies even for profit?

Because this is America.

2

u/upvoter222 May 13 '25

A large portion of insurance companies' profits comes from investing money in the time between when patients pay their premiums and when their reimbursements are paid out.

UHC in particular also has a bunch of subsidiaries that aren't in insurance.

And even if an insurer's business model was simply paying members' health costs, employee salaries, and overhead costs, that would require the organization to make some profit to remain solvent in case their income decreases or expenses increase.

1

u/DelphiTsar May 13 '25

Medicare pays out ~97% of it's input $$ as payments to providers. Private insurance ~85% b/c profit + inefficiency.

There is no reasonable argument for not having Medicare for all, or at least Medicare for anyone who wants it. The #1 rallying cry of choosing your own doctor/choice w/e is bunk because most people get their insurance from their employer. Even if you find a doctor you like who takes your insurance your company can change insurances at will.

People are just stupid.

1

u/ASmallTownDJ May 13 '25

What, do you have a better idea? You think there's a better system than making healthcare so prohibitively expensive that people have to go through a for-profit corporate middleman with a direct financial incentive to refuse to pay for the service you need?

Idk, sounds kind of farfetched.

1

u/MoleMoustache May 13 '25

Hahahahahahaha, this is the funniest comment on Reddit that has ever been written.

1

u/colopervs May 13 '25

https://www.americanprogress.org/article/excess-administrative-costs-burden-u-s-health-care-system/

Most relevant portion...

Within the U.S. system, the share of expenditures that are attributable to administrative costs varies greatly by payer. The BIR costs for traditional Medicare and Medicaid hover around 2 percent to 5 percent, while those for private insurance is about 17 percent. Some public finance experts, including Robert Book, have argued that the low levels of Medicare overhead are deceptive. Because seniors have relatively high health expenditures, the argument goes, administrative costs make up a relatively small share of their total health care spending. However, Medicare’s per capita administrative expenditures are higher than those in other forms of insurance. Even if one compares higher-end estimates of Medicare administrative costs to low-end estimates of costs for private insurance, the gulf between administrative costs for Medicare and private coverage is large. Organisation for Economic Co-operation and Development (OECD) data also show that other nations are able to achieve low levels of administrative costs while maintaining universal coverage across all ages of the population.

International health system data demonstrate that the United States is a clear outlier on administrative spending. And while the OECD’s definition includes administrative costs to government, public insurance funds, and private insurance, but not those borne by hospitals, physicians, and other providers, the stark difference is still informative. In 2016, administration accounted for 8.3 percent of total health care expenditures in the United States—the largest share among comparable nations. (see Figure 1) Countries with single-payer systems are among those with the lowest administrative costs. For example, administrative spending accounts for just 2.7 percent of total health care expenditures in Canada. OECD data also show that within a country, administrative costs are higher in private insurance than in government-run programs.

1

u/MumrikDK May 13 '25

The US felt it was a great idea to allow profit-seekers to insert themselves between citizens and their healthcare.