That's where you are misinformed.
Insurance as a whole uses a number that judges Premium income vs expenses. It's called a combined ratio. The healthcare industry sits at a 97%. Which means that they make 3% in profit. Does 3% sound like a good margin? So how do they make money...
Insurance companies have to have enough reserve capital to pass regulatory standards to guarantee they can pay legit claims. The rest is invested and that's where insurance makes money. Not by premium costs. In fact... let's explore premiums.
Insurance companies and healthcare corporations go to the negotiating table and end up meeting somewhere in between what healthcare places as the ceiling and what insurance places at the floor of the cost. That number is then analyzed to determine premium within regulatory standards.
So negotiation #2 is up... several people were priced out of insurance so they are charged the healthcare preferred cost. They cant pay that obviously so what healthcare does is they add the money owed to the ceiling costs they think they are owed. The ceiling at the start of negotiation is higher therefore the agreed price comes out higher. Therefore, premiums go up. Around and around we go
Take a look at an itemized bill of a delivery. $50 for a half used box of gloves, $75 for a tylenol. Then take a peak at what insurance agreed to pay for those. Hint: it'll be less. It's called the "negotiated price" And with those outrageously inflated prices you wonder why insurance costs so much. Like I said, tell healthcare stop over charging and subsidizing their losses onto insurance companies. Charging 50 bucks for a box that costs 2.50 at CVS and even less wholesale.
Want to talk about why some claims get denied? Because the healthcare industry has been caught with fraud a million times. Theres no concern from the patient on the cost of the visit either. Too many people, over time, have looked at their bill, noticed it's crazy but shrugged because "insurance is paying and not me" three years later "wHy DiD mUh PrEmIuMz GeAuX uP" It's not rocket surgery.
The negotiations for the insurance companies is trying to manage their expenses. On what planet is any company interested in increasing their expenses so they can slowly raise premiums? All that does is price people out of paying into the pool and the expenses remain high with less insureds which is a recipe for bankruptcy. See Statefarm in Florida for homeowners policies back in the mid 2000s.
I guess I thought his post read rather general not AT you but it was a discussion you two were having. I just offered a shot from the grassy knoll.
